Abstract
The Covid-19 pandemic has had an impact on the Indonesian economy. The purpose of this study was to analyze the causality and balanced relationship in the long term between RR, IR and INF variables during the Covid-19 pandemic. With the Granger Causality and Johansen Cointegration test methods, the results showed that there is a long-term balance between RR, IR and INF. RR and IR are one-way causality relationships, IR and INF are one-way causality relationships. There is no causality relationship between IR and RR and vice versa during the Covid-19 pandemic. The RR policy affects the determination of IR and IR affecting Indonesia's INF during the Covid-19 pandemic. To reduce the inflation rate during the pandemic, Bank Indonesia needs to implement RR policy through the determination of interest rates.
Highlights
The Covid-19 pandemic has had an impact on the Indonesian economy
The spread of the Coronavirus that has spread to various parts of the world has an impact on the Economy of Indonesia, both in terms of trade, investment and tourism(Hanoatubun, 2020).this phenomenon disrupts the economies of developing countries including Indonesia
Corona Virus Disease 19 (Covid-19) is one of the pandemics that have spread to almost all countries, including Indonesian
Summary
The purpose of this study was to analyze the causality and balanced relationship in the long term between RR, IR and INF variables during the Covid-19 pandemic. The RR policy affects the determination of IR and IR affecting Indonesia's INF during the Covid-19 pandemic. Adapun tujuan dari penelitian ini adalah untuk menganalisis hubungan kausalitas dan keseimbangan dalam jangka panjang antara variabel RR, IR dan INF selama pandemi Covid-19. Dengan metode Granger Causality dan Johansen Cointegration test, hasil penelitian menunjukkan bahwa terjadi hubungan keseimbangan dalam jangka panjang antara RR, IR dan INF. Inflation is a state of the economy in a country where there is a tendency to increase prices of goods and services in general over a long period (continuously) due to unbalanced flows of money and goods(Feranika & Haryati, 2020).The picture shows the trend of Indonesia'sinflation data before the pandemic, namely Nov19-Oct. It is possible to reduce the amount of money circulating in the community and through reserve requirement policy by Bank Indonesia in regulating interest rates
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