Alisis Permintaan Akan Uang Kas Di Indonesia 1975-1996

ABSTRACT Before deregulation 1983 the monetary sector was dominated by the government Controlling money supply is directly influenced by Bank Indonesia, so as the t rate and commercial bank ceiling credit. About 85% of banking assets was mated by the state bank Banking deregulation 1983 resulted in a more flexible banking sector. Ceiling was abolished and interest rates become market determined As a result funds ilization increasers more variety of banking product and competition is getting The banking development has led a dramatic change in the demand for money mg a fairly standard money demand model, this study attempt to analize: Whether there is a liquidity trap (as indicated by high interest elasticity of money demand) Whether there is also an economies of scale of holding money Stability of the demand for money Using data for the period 1975 - 1996 and then disagregated into before and r deregulation, the empirical results are: For the periode 1975 - 1996 interest rate was significance factor affecting demand for money and the elasticity is greater than one especially after deregulation. This indicate that there is a liquidity trap, so that fiscal policy is more effective. b) There is also an economies of scale as indicated by less elastic demand for money with respect to income. The reason is that a rapid development in the payment system, such as the use of credit card. Finally, using Chow-test shows that the demand for money is unstable. The implication is that real sector policy is more appropriate than monetary policy