Impact of Macroeconomic Indicators on The Indonesia Stock Exchange (IDX) Composite Index Performance
Journal Title: International Journal of Current Science Research and Review - Year 2024, Vol 7, Issue 08
Abstract
This study examines the impact of macroeconomic indicators on the performance of the Indonesia Stock Exchange (IDX) Composite Index from 2014 to 2023, focusing on four key variables: interest rates, inflation, money supply (M2), and Gross Domestic Product (GDP). Using a Vector Autoregressive (VAR) model, the research investigates the short-term dynamics between these variables. The findings show that in the VAR estimation, only the lag 1 M2 value has a statistically significant coefficient. However, the Impulse Response Function (IRF) analysis reveals that shocks to the Bank Indonesia rate, inflation, money supply, and GDP initially cause significant fluctuations in the Jakarta Stock Exchange price index, but these effects are short-lived, with the index stabilizing around zero after several periods. These results provide valuable insights for policymakers and investors, emphasizing the importance of understanding macroeconomic conditions for making informed stock market decisions.
Authors and Affiliations
Widhiyaffa Akbariaza,
Keywords
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- EP ID EP743205
- DOI 10.47191/ijcsrr/V7-i8-83
- Views 25
- Downloads 0
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