FINANCIAL LIBERALIZATION AND ECONOMIC GROWTH IN INDONESIA

Authors

  • Rini D Astuti UPN “Veteran” Yogyakarta

Keywords:

Economic Growth, Financial Liberalization, Error Correction Model

Abstract

The objective of this study was to examine the empirical relationship between financial and economic growth by using broad money as a percentage of GDP and bank credit to the private sector as a percentage of GDP as an indicators of financial liberalization. It argues that broad money as a percentage of GDP have a clear disadvantage over economic growth in Indonesia during 1970-2002. The main findings are as follows: First, in short run, the study finds its measure of broad money as a percentage of GDP to have a significantly negative effect on the economic growth, and it measure of bank credit to the private sector as a percentage of GDP has no significantly positive effect on the economic growth. Second, in long run, it finds the impact of broad money as a percentage of GDP and bank credit to the private sector as a percentage of GDP on economic growth to be consistent with the short-run.

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How to Cite

Astuti, R. D. (2010). FINANCIAL LIBERALIZATION AND ECONOMIC GROWTH IN INDONESIA. Jurnal Ekonomi &Amp; Studi Pembangunan, 6(2), 137–148. Retrieved from https://journal.umy.ac.id/index.php/esp/article/view/3235

Issue

JESP Volume 6 Nomor 2, Oktober 2005

Section

Articles

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