MONETARY POLICY TRANSMISSION AND CREDIT CARDS: EVIDENCE FROM INDONESIA

Authors

KP Prabheesh, Indian institute of technology Hyderabad, IndiaFollow
R Eki Rahman, Bank Indonesia, IndonesiaFollow

Document Type

Article

Abstract

This paper empirically tests the dynamics of credit cards and monetary policy in the context of Indonesia. Using monthly data from 2006 to 2018 and a structural vector autoregressive model, our findings indicate that credit card usage is mainly driven by Indonesia’s fast economic growth over the last decade, which indeed reflects the role of credit cards in consumption smoothing. The study also finds that monetary policy transmission through the lending channel is weak, with a more prevalent role for exchange rates and global oil prices in the transmission process.

Recommended Citation

Prabheesh, KP and Rahman, R Eki (2019) "MONETARY POLICY TRANSMISSION AND CREDIT CARDS: EVIDENCE FROM INDONESIA," Bulletin of Monetary Economics and Banking: Vol. 22: No. 2, Article 5.
DOI: https://doi.org/10.21098/bemp.v22i2.1039
Available at: https://bulletin.bmeb-bi.org/bmeb/vol22/iss2/5

First Page

137

Last Page

162

Creative Commons License

This work is licensed under a Creative Commons Attribution-NonCommercial 4.0 International License

Country

India

Affiliation

Indian institute of technology Hyderabad