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The Effect of GDP, Zakat, and Infaq Shadaqah On-Demand for Money and Their Relationship to Income and Poverty in Indonesia

In: 4th International Conference on Islamic Economics, Business, Philanthropy, and PhD Colloquium (ICIEBP) 2022

Author

Listed:
  • Eva Misfah Bayuni

    (Shari’a Banking Program, Universitas Islam Bandung, Faculty of Shari’a)

Abstract

This study aims to determine the effect of macroeconomic variables, Zakat and Infaq Shadaqah on money demand in Indonesia. The used data is secondary data from the 2010-2019 time series. The method of this research is using Autoregressive Distributed Lag (ARDL). E-views 9 program is used for processing data. The results of the LM test on the M0 show that there is no autocorrelation problem in the estimated M0 ARDL. Based on the short-term ECM estimation of the M0, several variables have significant values that affect the demand for money. These variables are significant GDP at lag 2 with a significant level of 10%, Zakat is significant at a significant level of 1% and Infaq Shadaqah is significant at lag 1 and 2 with a significant level of both 5%. While the ARDL estimation results show that the variables of GDP, Zakat, and Infaq Shadaqah significantly affect the demand for money in the long term at 1%, 1, % and 10% levels. Furthermore, GDP has a positive effect on income distribution and a negative on poverty. However, the current increase in GDP is considered not in favor of the poor. Zakat also has a significant negative effect on poverty while Infaq Shadaqah also has a negative but not significant effect.

Suggested Citation

  • Eva Misfah Bayuni, 2023. "The Effect of GDP, Zakat, and Infaq Shadaqah On-Demand for Money and Their Relationship to Income and Poverty in Indonesia," Advances in Economics, Business and Management Research, in: Meri Indri Hapsari & M. Bastomi Fahri Zusak (ed.), 4th International Conference on Islamic Economics, Business, Philanthropy, and PhD Colloquium (ICIEBP) 2022, pages 73-86, Springer.
    • Handle: RePEc:spr:advbcp:978-94-6463-176-0_6
    DOI: 10.2991/978-94-6463-176-0_6
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