Using monthly time-series data and both short-and long-run models, our paperexamines the determinants of Indonesia’s income velocity of money. Our findingssuggest that in the long-run, tax revenue, short-term interest rate, industrial productionand, in the short-run, money demand, significantly determine income velocity ofmoney. Our analysis suggests that the effect on income velocity is mostly over thelong-run as most determinants are dormant in the short-run. The implication from apolicy perspective is that shocks are unlikely to burden income velocity over short timehorizons.
Sharma, Susan Sunila and Syarifuddin, Ferry
"DETERMINANTS OF INDONESIA’S INCOME VELOCITY OF MONEY,"
Bulletin of Monetary Economics and Banking: Vol. 21:
3, Article 4.
Available at: https://bulletin.bmeb-bi.org/bmeb/vol21/iss3/4