Authors :
Prabhanshu Sharma; Frozan Ashoori
Volume/Issue :
Volume 8 - 2023, Issue 10 - October
Google Scholar :
https://tinyurl.com/mvw3324c
Scribd :
https://tinyurl.com/58fxdpwf
DOI :
https://doi.org/10.5281/zenodo.10025109
Abstract :
This paper examines the relationship between
Exchange rates, GDP, and Government expenditure as
macroeconomic variables on the Inflation of Indonesia
which is struggling with increased prices of goods and
services as it has been a persistent problem in Indonesia
for many years. In 2023, it is so far at 5.47% which is
above the target set by the Central Bank of Indonesia of
2-4%. With the data taken from the World Bank and
IMF, the methodology consists of stationarity check,
Cointegration analysis, and Error Correction Model to
identify the long-run nexus among variables. The
estimation result found that GDP is positively correlated
with Inflation, Exchange rate is positively correlated
with mild effects on inflation and government
expenditure is negatively correlated with Inflation.
Keywords :
Built-in Inflation, ARDL Bounds Cointegration, Error Correction Model, Currency Depreciation
This paper examines the relationship between
Exchange rates, GDP, and Government expenditure as
macroeconomic variables on the Inflation of Indonesia
which is struggling with increased prices of goods and
services as it has been a persistent problem in Indonesia
for many years. In 2023, it is so far at 5.47% which is
above the target set by the Central Bank of Indonesia of
2-4%. With the data taken from the World Bank and
IMF, the methodology consists of stationarity check,
Cointegration analysis, and Error Correction Model to
identify the long-run nexus among variables. The
estimation result found that GDP is positively correlated
with Inflation, Exchange rate is positively correlated
with mild effects on inflation and government
expenditure is negatively correlated with Inflation.
Keywords :
Built-in Inflation, ARDL Bounds Cointegration, Error Correction Model, Currency Depreciation
