Economic Sectors sensitivity to Islamic and conventional monetary instrument: Case study in Indonesia

Raditya Sukmana, Dr., SE., M.A. (2015) Economic Sectors sensitivity to Islamic and conventional monetary instrument: Case study in Indonesia. In: Islamic Economics: Theory, Policy and Social Justice. Developing Inclusive and Sustainable Economic and Financial Systems, 2 . Qatar Foundation Journal, Qatar, pp. 111-120. ISBN 978-9927-118-22-7

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The purpose of monetary policy is to affect the economic activity through various channels of monetary transmission. One of the transmission channels Is via Islamic banking through financing to various sector of the economy. The change of monetary instruments certainly affects economic sectors differently Given the dual monetary system (Islamic and conventional) in Indonesia, it is interesting to see how those rates influence each of the economic sectors. This is important for the government in designing future economic programs by determining the specific sectors which must be prioritized. This paper aims to investigate the sensitivity of the economic sectors in response to the change in the Islamic and conventional monetary rate. The paper relies on the unit root test, the co-integration test, and impulse response functions, focusing on the period from May 2006 to February 2011. The data used is from monthly economic sectors for Islamic and conventional systems, Islamic monetary rates, and conventional monetary rates. The results show that Islamic banks play important roles in the monetary transmission process in the Indonesian economy. In particular, specific economic sectors react differently to both Islamic monetary instruments as well as conventional monetary instruments.

Item Type: Book Section
Uncontrolled Keywords: Economic Sectors, Islamic and conventional monetary instrument
Subjects: H Social Sciences > HF Commerce > HF1021-1027 Commercial geography. Economic geography
H Social Sciences > HG Finance > HG3810-4000 Foreign exchange. International finance. International monetary system
S Agriculture > SH Aquaculture. Fisheries. Angling > SH1-691 Aquaculture. Fisheries. Angling > SH201-399 Fisheries > SH334 Economic aspects. Finance
Divisions: 04. Fakultas Ekonomi dan Bisnis > Ekonomi Syariah
Raditya Sukmana, Dr., SE.,
Depositing User: Tn Sugeng Riyanto
Date Deposited: 12 Apr 2022 04:48
Last Modified: 12 Apr 2022 04:48
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