Document Type
Article
Abstract
This paper studies the impact of a universally accessible interest-bearing Central Bank Digital Currency (CBDC) on macroeconomic stability and monetary policy in Indonesia. For this end, we construct a simple reduced-form New Keynesian model calibrated corresponding to the monthly data for Indonesia from July 2005 to February 2022. We find that the CBDC regime significantly improves macroeconomic stability in Indonesia. In this regard, the CBDC rate, as the additional monetary policy instrument, responsively reacts to macroeconomic fluctuations and gives a significant impact on the demand side. Our results also suggest that monetary policy is more effective under the CBDC regime than in the non-CBDC
Recommended Citation
Izzulhaq, Syahid; Kurnia, Akhmad Syakir; and Maharda, Johan Beni
(2024)
"Central Bank Digital Currency, Monetary Policy, And Macroeconomy: Evidence From Indonesia,"
Bulletin of Monetary Economics and Banking: Vol. 27:
No.
2, Article 3.
DOI: https://doi.org/10.59091/2460-9196.2273
Available at:
https://bulletin.bmeb-bi.org/bmeb/vol27/iss2/3
First Page
241
Last Page
264
Creative Commons License
This work is licensed under a Creative Commons Attribution-NonCommercial 4.0 International License
Country
Indonesia
Affiliation
Diponegoro University
