ANALYSIS OF THE ROLE OF ISLAMIC BANKING IN INDONESIA'S ECONOMIC GROWTH
Keywords:VAR/VECM, Economic Growth, Islamic Banking
Banking is one sector that is important for the growth of a country, because the bank is the intermediary institutions which collect funds from people who have a surplus and distribute to the people who need funds. This study aimed to analyze the role of Islamic banking on economic growth due to the rapid development of Islamic banking in Indonesia. By using VAR/VECM to determine the influence of Islamic banking for economic growth is represented by the IPI. The results showed that the total assets of Islamic banking does not have a significant effect on economic growth, while the Islamic banking financing a significant effect on economic growth.