2021•ASIAN Economic and Business DevelopmentOpen access

The Impact of Money Demand Motivation on Money Supply Indonesia

Arin Jannah Dinonasih

Abstract

This study aims to investigate the impact of money demand motive on a money supply based on keyness theory. The method used in this study is the ordinary least squares method with an annual period from 2011 to 2020. We find that In Indonesia, the money demand motive has a significant effect on money supply where the transaction motive has a significant negative relationship with the money supply. A precautionary motive has a significant positive correlation with the money supply. The motive of speculation has a significant positive relationship with the money supply.

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Available abstract

Key concepts: Money supply, Endogenous money, Money measurement concept, Economics, Demand deposit, Ordinary least squares, Monetary economics, Velocity of money