Analysis of the Impact of Monetary Policy Instruments on Economic Growth in Indonesia by 2013 to 2023
Journal Title: Journal of Economics, Finance and Management Studies - Year 2024, Vol 7, Issue 10
Abstract
Based on quarterly data by 2001Q1 to 2017Q2, this research and study covers theoretical debates and empirical studies on the factors that affect economic stability and their effect on the financial sector's performance. This study applies the Ordinary Least Square (O.L.S.) method to the Cointegration and Engle Granger-Error Correction Model (E.C.M.) methods. E.C.M. is done to assess the long-term validity and balance of the research model and foresee potential flaws and discrepancies among the theoretical and statistical models. Even while the M2 variable has no discernible effect on G.D.P. during the observation period, the research findings demonstrate that, over the long run, there is a balance among changes in G.D.P. and monetary variables, such as interest rates, Inflation, M2, and the rupiah value. On the other hand, the E.C.T. variable has a significant short-term effect on fluctuations in G.D.P. Interest rates, Inflation, M2, and exchange rates had no discernible effect on G.D.P. throughout this time. Thus, changes in monetary variables, particularly interest rates, Inflation, and M2, tend to effect G.D.P. The average quarterly financial deepening in Indonesia for the observation period was 3.80 per cent, according to the outcomes of the financial performance study. Furthermore, M2 growth during the same period was 3.03 per cent, compared to Indonesia's average quarterly economic growth of 1.36 per cent.
Authors and Affiliations
Fela Cininta Arimbi Putri , Taufiq Chaidir,
Keywords
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- EP ID EP750245
- DOI 10.47191/jefms/v7-i10-45
- Views 21
- Downloads 0
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