Pengaruh Jumlah Uang Beredar dan Tingkat Suku Bunga serta Pengeluaran Pemerintah terhadap Inflasi di Indonesia

Effect of Money Supply and Interest Rates and Government Expenditures to Inflation in Indonesia..This study aims to determine the effect of the money supply, interest rates and government expenditures to inflation in Indonesia. Theory used the theory of Irving Fisher, Gibson Paradox theory and the theory of Keynes. The study was conducted by using multiple linear regression analysis tool Cobb-Douglas function. Hypothesis testing using t test and F test is used to determine the feasibility of the model.The analysis revealed a significant effect of money supply on inflation, interest rates have a significant effect on inflation and government expenditures significant effect on inflation. The money supply affects most to inflation in Indonesia.Keywords: Money Supply, Interest Rates, Government Expenditures and Inflation

GIBSON PARADOX REVISITED – LIQUIDITY CHAIN EFFECT

Gibson paradox remains a puzzle in the discipline of economics. Previous studies attempted to resolve the paradox looking separately at the gold standard, changing monetary regimes, inflation expectations, risk and uncertainty. Our study shows Gibson paradox holds for the Netherlands 1800-2012 with real long interest rates and prices diverging after 2008. This paper offers empirical evidence (nonlinear cointegration) on the integrity of the Gibson paradox. Single factor cannot explain the paradox itself (because of its nonlinear nature) as previous studies attempted. Empirical link between long interest rates and prices is caused by complex interaction between purchasing power, liquidity, gold prices, market turnover, stocks accumulation, productivity, short-term interest rates. This approach analysis the purchasing power and price relation, resulting in firms’ turnover and liquidity shifts, leading to short-term borrowings changes and pressures on interest rates in the short as well as in long-term. Actually, the model enables us to track the series of price change effects finally resulting in interest rates shifts, via a set of microeconomic and financial laws, which taken at the aggregate level could offer the Gibson paradox explanation. Further studies must explore nonlinear nature of the paradox in order to explain it. Study results have important implications for policy makers and firm governance policy.

Was the Gibson Paradox for real? A Wicksellian study of the relationship between interest rates and prices

We examine the relationship between prices and interest rates for seven advanced economies in the period up to 1913, emphasising the UK. There is a significant long-run positive relationship between prices and interest rates for the core commodity standard countries. Keynes ([1930] 1971) labelled this positive relationship the ‘Gibson Paradox’. A number of theories have been put forward as possible explanations of the paradox but they do not fit the long-run pattern of the relationship. We find that a formal model in the spirit of Wicksell (1907) and Keynes ([1930] 1971) offers an explanation for the paradox: where the need to stabilise the banking sector's reserve ratio, in the presence of an uncertain ‘natural’ rate, can lead to persistent deviations of the market rate of interest from its ‘natural’ level and consequently long-run swings in the price level.