Analysis of The Impact Conventional Monetary Economic Systems For Profit Sharing Shariah Banking In Indonesia

Irawan, Dian Septiana Sari, Abdi Setiawan;

Abstract

This study aims to analyze the relationship of inflation causality, BI rate, money supply to sharia bank profit sharing through the VAR (Vector Autoregressive) and VECM (Vector) Error Correction Models), and test Decomposition Variance on the model to see the largest contribution of conventional monetary economic variables . The population in this study is macroeconomic data and profit sharing for the period January 2005 to December 2015. The data analysis technique of this study uses the VAR Model, which is a non-structural model because it is atheistic. The VAR model has a simpler model structure with a minimal number of variables where all the variables are endogenous variables with the independent variable is lag. The VAR model is designed for stationary variables that do not contain trends. Stochastic trends in the data indicate that there are long-run (short-term) and short-run (short-term) components in time series data. Based on testing, estimation and testing of models, VECM (1) is obtained as the best model to explain inflation causality, BI rate, and money supply, while VAR (2) is the best model to explain the causal relationship of sharia bank profit sharing, inflation, BI rate, and money supply. The model results explain that there is a long-term causality relationship between variables, while the short-term causality relationship in VECM (1) through the Granger causality test shows that the granger variable causes inflation to increase the BI rate, while in VAR (2)) the causality between Sharia Bank Profit Sharing and other macroeconomic variables.