Achieving monetary stability is a primary goal promoted by monetary authority, including through reaching low and stable the rate of inflation. Indonesia and Malaysia are the two countries which have been implementing dual monetary system where conventional and Islamic system running side by side. Due to inflation is always a monetary phenomena, it is interesting to look at some determinants which generate the rate of inflation. The paper attempts to investigate which variables, either individually or accumulately, form the inflation in the both countries. Subsequently, which system is more stable in terms of generating inflation rate in both countries?. The paper employs several monetary variables which proxy of conventional and Islamic group spanning from January 2012 till April 2015. By using vector autoregressive (VAR) approach, the results reveal that inflation generating under conventional system is unstable compared to Islamic system due to an inherent instability of interest rate and fractional reserve banking in both countries. Moreover, the Islamic monetary system can reduce the generated inflation in both countries around 25-50% if was practically implemented. Therefore, continous effort in terms of establishing institutional and instrumental arrangements should be gradually developed to further accomodate and enhance the effectiveness of monetary policy particularly in curbing inflation rate under dual monetary systems. Â Â Â Â Â
| Published by | Universitas Airlangga |
| Journal Name | Jurnal Ekonomi dan Bisnis Islam |
| Contact Phone | - |
| Contact Name | - |
| Contact Email | - |
| Location | Kota surabaya, Jawa timur INDONESIA |
| Website | JEBIS| https://e-journal.unair.ac.id/index.php/JEBIS| |
| ISSN | ISSN : 24426563, EISSN : 25273027, DOI : -, |
| Core Subject | Economy, |
| Meta Subject | Economics, Econometrics & Finance, |
| Meta Desc | Journal of Economics and Business Islamic (JEBIS) accepts original manuscripts in the field of Islamics Economics, including research reports, case reports, application of theory, critical studies and literature reviews. The spread of Islamic Economics include: 1. Islamic Finance and Capital Market 2. Islamic Banking 3. Management of Islamic Business and Entrepenuership 4. Islamic Financial Institution non Bank |
| Penulis | Yuliadi, Imamuddin , Kusuma, Dimas |
| Publisher Article | Department of Islamic Economics, Faculty of Economy and Business Universitas Airlangga |
| Subtitle Article | Jurnal Ekonomi dan Bisnis Islam (Journal of Islamic Economics and Business) Vol 2, No 2 (2016): JULI-DESEMBER 2016 |
| Scholar Google | http://scholar.google.com/scholar?q=%2Bintitle%3A&… |
| View Article | http://e-journal.unair.ac.id/J… |
| DOI | https://doi.org/10.20473/jebis.V2I2… |
| DOI Number | DOI: 10.20473/jebis.V2I22016.%p |
| Download Article [1] | http://e-journal.unair.ac.id/JEBIS/artic… |
| Download Article [2] | http://download.garuda.ristekdikti.go.id… |
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