Monetary Policy and Innovation During Recession in Indonesia

Monetary Policy in Japan’s ‘Great Recession:’

This paper estimates a reduced-form model of the Japanese economy that incorporates a role for money in the determination of GDP growth and inflation. Real base money growth is shown to be a significant determinant of GDP growth, suggesting a role for money even under a monetary policy operating regime in which base money is endogenous to the determination of an official interest rate. An aggre...

Monetary Policy in the Great Recession

This paper reviews the monetary policy in Japan during the “great recession.” The paper focuses especially on the conduct of monetary policy when the ZIRP (zero interest rate policy) was in place. The nominal call rate was virtually zero, but we find the monetary policy was not that expansionary in some other dimensions. We examine the long-run relation between the real M2+CD and the real GDP, ...

Regional Dimensions of Monetary Policy in Indonesia

Transmission Channel and Effectiveness of Dual Monetary Policy in Indonesia

This paper investigates the transmission mechanism of dual monetary system from conventional and Islamic policy rates to inflation and output. We apply Granger Causality and VAR methods on monthly data of Indonesian banking, during the period of January 2003 to December 2009. The result shows that conventional policy rate is transmitted to output and inflation, while Islamic policy rate are not...

Towards Improved Monetary Policy in Indonesia: Response to De Brouwer

This paper presents a number of responses to Gordon de Brouwer’s criticisms of my paper on monetary policy in Indonesia. Among other things, it argues that de Brouwer has failed to disentangle the impact of two exogenous disturbances on prices—and relative prices—during the crisis and post-crisis period. These disturbances were capital flight, which resulted in real depreciation of the rupiah, ...