Electronic money’s impact on efficiency payment and substitution for cash in Indonesia

Alghifari Mahdi Igamo, Telisa Aulia Falianty

Research output: Chapter in Book/Report/Conference proceedingChapterpeer-review

Abstract

Using monthly data from Indonesia from 2011 to 2018, this paper examines electronic money’s effect on the efficiency of the payment system and on narrow money (M1) demand function using ARDL Model. From the ARDL short-term and long-term estimation results, the value of electronic money transactions significantly has a positive effect on consumption with a coefficient of 0.0039%. The positive relationship between electronic money and the level of consumption shows payment efficiency caused by electronic money transactions. From the ARDL short-term estimation results the value of electronic money transactions significantly has a positive effect on narrow money with a coefficient of 0.040717%. This shows that the growth of electronic money transactions in the short term is complementary and cannot replace the role of cash.

Original languageEnglish
Title of host publicationChallenges of the Global Economy
Subtitle of host publicationSome Indonesian Issues
PublisherNova Science Publishers, Inc.
Pages251-270
Number of pages20
ISBN (Electronic)9781536165357
ISBN (Print)9781536162769
Publication statusPublished - 1 Jan 2019

Keywords

  • Efficiency of payment system
  • Electronic money
  • Narrow money

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