ANALISIS NETRALITAS UANG INDONESIA: Studi Kasus Tahun 1990–2014

Abstract

According to Keynes and Friedman, money matters. That is based on the fact that money supply can affect national income. The analytical framework of aggregate demand and supply shows that there is a correlation between the increase of money supply and national income. An increase in money supply will increase aggregate demand and then change the equilibrium between aggregate demand and supply. The shift of aggregate demand increases price and therefore national income. This research aims to test the non-neutrality of money in Indonesia during the period of 1990-2014. Error Correction Mechanism (ECM) becomes the method used in order to fulfill the purpose of this study. The variables used in this study are real money (M1, M2, and quasi money) to observe the correlation between each kind of real money with real GDP. The result shows that there is enough evidence that real M1 affects real national income both in the short run and long run, while there is not enough evidence that real M2 and real quasi money cointegrate with national income. M1 is tend to matter, while M2 and quasi money are not tend to matter.