E3S Web Conf.
Volume 340, 2022The 13th of Aceh International Workshop and Expo on Sustainable Tsunami Disaster Recovery (The 13th AIWEST-DR 2021)
|Number of page(s)||6|
|Section||Human Security, Pandemic, and Communicable Disease|
|Published online||25 January 2022|
Economic fluctuations and monetary policy on the stock market during the COVID-19 pandemic in Indonesia
Faculty of Economics and Business, Universitas Syiah Kuala, Indonesia
* Corresponding author: firstname.lastname@example.org
The purpose of this study is to examine the stock market’s resiliency in the face of economic fluctuations and a crisis caused by the COVID-19 outbreak. using monthly data from 2011 to 2020 and an error correction model with the Composite Stock Price Index (conventional stock market system) and the Jakarta Islamic Index (Islamic stock market system) as dependent variables and policy interest rates, exchange rates, inflation, and crises as independent variables. In both stock market models, the regression results reveal that there is a short-term to long-term equilibrium relationship. Interest rates set by policymakers and crisis variables have a detrimental impact. In the long run, the exchange rate has a beneficial effect, and inflation has no influence on the two stock markets. In the short run, the findings in both markets are nearly identical, meaning that inflation and policy interest rates have little influence, whereas exchange rates have a negative impact. The crisis, on the other hand, had no impact on the JCI stock market. The crisis had a positive impact on the JII stock market, unlike the JII stock market. These findings are significant because they reveal a distinction that leads to a significant increase in the number of investors who believe it is safe to invest in the Islamic stock market in the short term, notwithstanding the crisis.
© The Authors, published by EDP Sciences, 2022
This is an Open Access article distributed under the terms of the Creative Commons Attribution License 4.0, which permits unrestricted use, distribution, and reproduction in any medium, provided the original work is properly cited.
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