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JSPES, Vol. 47, No. 3-4 (Fall-Winter 2022)
pp. 253-268

Is Fintech a Money Multiplier in Transition Periods in Indonesia?

David Kaluge
University of Brawijaya, Malang, IndonesiaGianluca Piero Maria Virgilio

This study aims to address the question of how financial technology (Fintech) acts as a money multiplier in the short and long runs, particularly in the transition period from low to high intensive use of financial technology. This study employed quarterly data provided by the Indonesian Central Bank from 2005 to 2017. Fintech has forced financial institutions (Central Bank) to redefine what is M1, as well as M2. By applying the model of the multiplier coefficient function, it was found that the multiplier coefficient has fluctuated in the short-run and it is affected by Fintech in several ways. In the long run, it was also confirmed that Fintech has a significant role in increasing the coefficient of the multiplier.