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Effects of Monetary Policy on Inflation and National Economy Based on Analysis of Bank Indonesia Annual Report

Author

Listed:
  • Silvia Angelina

    (Universitas Widyatama)

  • Nugi Mohammad Nugraha

Abstract

This study focuses on analysis (1) money supply effect, previous period money supply, the level of SBI (Bank Indonesia Certificate), the exchange rate, and the economy on inflation in Indonesia (2) The effect of inflation, domestic investment, previous period domestic investment, foreign investment, previous period foreign investment, and economic labor in Indonesia. Time series data using the simultaneous analysis model equation of the Two-Stage Least Squared (TSLS) method. The results of the study concluded that (1) the money supply had a significant and positive impact on inflation, the money supply in the previous period had a significant and positive impact on inflation, the SBI rate had a significant and negative effect on inflation, the exchange rate had a significant and positive effect on inflation. Meanwhile, the national economy has no significant and positive effect on inflation. If the money supply increases, inflation will increase. If the money supply in the previous period increased, inflation would also increase. If the SBI interest rate rises, inflation will depreciate. If the exchange rate rises, inflation will appreciate. If the level of the national economy rises, inflation will appreciate. (2) Domestic investment, previous period domestic investment, foreign investment, previous period foreign investment, and labor have a significant effect on the economy in Indonesia, while the inflation rate has no significant effect on the economy in Indonesia.

Suggested Citation

  • Silvia Angelina & Nugi Mohammad Nugraha, 2020. "Effects of Monetary Policy on Inflation and National Economy Based on Analysis of Bank Indonesia Annual Report," Technium Social Sciences Journal, Technium Science, vol. 10(1), pages 423-435, August.
    • Handle: RePEc:tec:journl:v:10:y:2020:i:1:p:423-435
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    Citations

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    Cited by:

    1. Mirza, Nawazish & Naqvi, Bushra & Rizvi, Syed Kumail Abbas & Umar, Muhammad, 2023. "Fiscal or monetary? Efficacy of regulatory regimes and energy trilemma of the inflation reduction act (IRA)," International Review of Financial Analysis, Elsevier, vol. 90(C).
    2. Talitha Nathaniela Nariswari & Nugi Mohammad Nugraha, 2020. "Profit Growth: Impact of Net Profit Margin, Gross Profit Margin and Total Assets Turnover," International Journal of Finance & Banking Studies, Center for the Strategic Studies in Business and Finance, vol. 9(4), pages 87-96, October.
    3. Sardo Arifin Bintang Simbolon & Shinta Oktafien, 2021. "Effect of Work Discipline and The Work Environment on Employee Performance CV. Bolon Tua," Technium Social Sciences Journal, Technium Science, vol. 20(1), pages 704-725, June.

    More about this item

    Keywords

    Monetary Policy; Inflation; National Economy;
    All these keywords.

    JEL classification:

    • R00 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - General - - - General
    • Z0 - Other Special Topics - - General

    Statistics

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