Analisis Financial Deepening Terhadap Pertumbuhan Ekonomi di Indonesia Periode 1988-2012

Abstract

Economic development of a country not separated from the financial sector .The financial sector is very important role in improving economic growth .In the face of AEC 2015 there are the important thing must be considered in the financial services sector is banking industry and the capital market must be developed one reason must be developed is financial deepening in the banking sector and capital market. The purpose of this research is to know the deepening financial influence on economic growth in indonesia and know financial deepening variables of the most dominant influence on economic growth with the period 1988-2012 .This study using a method of Ordinary Least Square (OLS ) the results show that the ratio of the money supply to gdp or called also with the monetization levels and ratio of private credit to GDP are negative and not significant to economic growth and the ratio of market capitalization has positive effect and significant to economic growth. The most variables dominant influence on economic growth is ratio market capitalization to GDP. So to conclude that liberalization and technology development capital market has caused intermediation function went from bank to capital market and financial insitutes non-intermediary as insurance as well as of the liberalization of the community through freedom in choosing to keep asset them and giving a way to make diversification over assetnya, thus reducing monitoring-cost.It is who caused the disintermediation in banking industry.