The Measurement of Marginal Propensity to Consume (MPC) Based on Indonesian,s Consumption Pattern for the Period 2000-2006
Abstract
Consumption expenditure is the biggest component of Gross Domestic Product, which indicate a
country walfare. The objective of this paper is to estimate the Indonesian,s marginal propensity to
consume and it,s rate of change for the period of 2000-2006. The empirical models used in this
paper were based on the one developed by Dumairy (1995) on the correlation between consumption
and permanent income , inflation, Wilcox ( 1989 ) on the correlation between consumption change
and interest rate and employment, and Faini (1991) on the correlation between consumption change
and saving , money supply , interest rate , real exchange and inflation. The models were estimated
after OLS assumptions. In the of period 2000-2006, MPC estimated is 0,686. It,s also revealed that
real exchange rate and inflation level give a negative impact to the change of consumption , although
partially the real exchange rate and inflation level give the significant influence.
country walfare. The objective of this paper is to estimate the Indonesian,s marginal propensity to
consume and it,s rate of change for the period of 2000-2006. The empirical models used in this
paper were based on the one developed by Dumairy (1995) on the correlation between consumption
and permanent income , inflation, Wilcox ( 1989 ) on the correlation between consumption change
and interest rate and employment, and Faini (1991) on the correlation between consumption change
and saving , money supply , interest rate , real exchange and inflation. The models were estimated
after OLS assumptions. In the of period 2000-2006, MPC estimated is 0,686. It,s also revealed that
real exchange rate and inflation level give a negative impact to the change of consumption , although
partially the real exchange rate and inflation level give the significant influence.
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PDF (Bahasa Indonesia)DOI: https://doi.org/10.29313/jstat.v7i2.962
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