Economica: Journal of Economic and Economic Education
Vol 11, No 1 (2022): Economica: Journal Of Economic And Economic Education

Monetary Policy vs. Fiscal Policy: Which Is More Influential Against Inflation in Indonesia?




Article Info

Publish Date
31 Oct 2022

Abstract

This study aims to determine and analyze which one is more influential or has the highest contribution to inflation, by comparing the variables of interest rates and government spending. This type of research is descriptive research, where the data used is secondary data in the form of time series data from 1991 to 2021 obtained from related institutions and institutions, which are analyzed using the Vector Error Correction Model (VECM) method. Stages of Stationarity Test, Cointegration Test, Impulse Response Function (IRF), and Variance Decomposition (VDC). The findings of this study are the overall variability of inflation in both the short and long term from interest rates of 79.95% in the short term and 71.44% in the long term. Meanwhile, the variability of government spending is 0.03% in the short term and 4.69% in the long term. So it can be concluded from the interest rate variable and government spending, it is interest rates that most influence inflation in Indonesia.

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Journal Info

Abbrev

economica

Publisher

Subject

Economics, Econometrics & Finance Education

Description

Economica: Journal Of Economic And Economic Education, sebuah jurnal internasional elektronik, menyediakan forum untuk menerbitkan artikel penelitian asli, artikel ulasan dari pakar yang diundang, dan berita teknologi baru yang terkait dengan Riset ekonomi dan Riset pendidikan ekonomi. Jurnal ini ...