Fiscal and Monetary Policy for The Development of Indonesian Plantation

Purpose: This study aims to explain the impact of the plantation sector on Indonesia's economic growth in 2021, focusing on Sustainable Development Goal (SDG) number 8, which emphasizes decent work and economic growth. Methodology/approach: This study adopts a quantitative approach using secondary data obtained directly from the Central Bureau of Statistics (BPS). Multiple Linear Regression is the method employed, along with testing for Classical Assumptions and T-statistics (partial test) using the STATA analysis tool. Results/findings: The research findings from the t-test indicate that out of the eight types of crops in the plantation sector, only tea significantly influences Indonesia's economic growth in 2021. Limitations: The limitations of this study include the number of dependent variables (eight) and the range of data time in 2021. Contribution: This research can serve as a reference for prioritizing the plantation sector, which has significant development potential, considering Indonesia's favorable geographical location. Therefore, it is expected that this potential can positively contribute to Indonesia's economic growth by aiming to achieve prosperity and Sustainable Development Goals (SDGs).

The paper analyzes the recent economic crisis and the Fed’s monetary policy used to relieve the recession and improve the economic growth. The latest target rate (monetary policy) is closed to zero since December 2008 with a new experimental policy (“quantitative easing”) to invigorate aggregate demand (investment, consumption, growth, and employment). This zero interest rate policy has reduced the deposit rate to zero and has affected negatively savings. It has eliminated the incentive to save and has made savings almost negative (dissaving or borrowing)and has contributed to this slow growth of output and persistent unemployment. This policy hasmagnified the debt of individuals and the low taxes on businesses have augmented the deficits and the debt of the country. The deposits rate has to cover at least the official inflation rate and an interest rate ceiling on loans must protect the borrowers from the high loans rates, especially the credit cards outrageous rates. The government must increase corporate taxes and reduce the national debt by lowering government expenditures (military expenditures), by restraining inefficiencies and corruption; but, increasing public investment. The public policies must be mixed policies to improve production and employment first and then to control inflation and interest rates. The current one-sided monetary policy and the abandoned fiscal policy need to be changed and become more effective, which are necessary to improve the nation’s welfare, fairness, equity, solidarity,justice, and to benefit the neglected middle class in our society. The middle class cannot work only to pay taxes and interest on its debt (redistribution of its wealth), due to low disposable income, negative savings, high unemployment, and unfavorable public policy. The country needs to correct its structural problems.

The paper analyzes the recent economic crisis and the Fed’s monetary policy used to relieve the recession and improve the economic growth. The latest target rate (monetary policy) is closed to zero since December 2008 with a new experimental policy (“quantitative easing”) to invigorate aggregate demand (investment, consumption, growth, and employment). This zero interest rate policy has reduced the deposit rate to zero and has affected negatively savings. It has eliminated the incentive to save and has made savings almost negative (dissaving or borrowing)and has contributed to this slow growth of output and persistent unemployment. This policy hasmagnified the debt of individuals and the low taxes on businesses have augmented the deficits and the debt of the country. The deposits rate has to cover at least the official inflation rate and an interest rate ceiling on loans must protect the borrowers from the high loans rates, especially the credit cards outrageous rates. The government must increase corporate taxes and reduce the national debt by lowering government expenditures (military expenditures), by restraining inefficiencies and corruption; but, increasing public investment. The public policies must be mixed policies to improve production and employment first and then to control inflation and interest rates. The current one-sided monetary policy and the abandoned fiscal policy need to be changed and become more effective, which are necessary to improve the nation’s welfare, fairness, equity, solidarity,justice, and to benefit the neglected middle class in our society. The middle class cannot work only to pay taxes and interest on its debt (redistribution of its wealth), due to low disposable income, negative savings, high unemployment, and unfavorable public policy. The country needs to correct its structural problems.

In this study intended 1) To study the changes of exchange rate (Kip / dollars), interest rates with Lao PDR's economic growth and 2) Analyze the relationship between the exchange rate (Kip / dollars), interest rates with economic expansion of Lao PDR. The data used in the study are time series data from 1997 to 2023, by using descriptive statistics to analyze changes and quantitative analyze is used on multiple regression equations on a Vector Autoregressive Model (VAR). The study found that: Exchange rate of Lao PDR trend be a higher average change which causes the kip to weaken continuously while interest rate especially loans interest rate will be a change in the upward direction in the early stages and has been a downward change in the recent trend; Lao PDR economic growth, there is continuous growth excepted during when there is no economic crisis or financial crisis including the outbreak of a pandemic and natural disasters. Estimated results in the relationship model of economic growth can be seen that the exchange rate is a relationship with economic growth with a statistical significance level of 0.1. If the exchange rate increases or decrease by 1%, holding other factors constant will affect in increased economic growth in the current year or decrease 0.1640 %; Interest rate is a correlation with economic growth in the current year and according to the given assumptions; it means: If the interest rate in the previous year increase or decrease by 1%, holding other factors constant will affect in economic growth in the current year increase or decrease 0.4189 % And there is a relationship in the same direction that is according to the given assumptions.

This study analyzes economic systems through complex systems simulation models. The impact of interest rate changes on three key economic variables, including the inflation rate, economic growth, and the unemployment rate, has been examined. Interest rate fluctuations, as one of the primary instruments of monetary policy, have extensive effects on economic variables. After data collection, simulation models such as agent-based models or network models are designed and implemented to simulate the complex interactions among various economic variables. At this stage, the NetLogo software is used to implement the models with high accuracy and to effectively run multiple simulations. The simulation results indicate that in the short term, an increase in the interest rate leads to a reduction in inflation and economic growth, but in the long term, this increase may cause a decline in production and a rise in unemployment. Conversely, a decrease in the interest rate may, in the short term, stimulate economic growth and reduce unemployment, but in the long term, it could lead to high inflation and economic crises. Ultimately, this study recommends that economic policymakers adjust interest rates carefully and with consideration of economic conditions and long-term forecasts in order to prevent adverse effects.

Realization of investment in Indonesia is dominated by foreign investors where capital intensive sector such as mining industry is the primary focus. To strengthen their roles in national economies, foreign investors should be directed to plantation sector since it has huge role in labor absorption and positive trade balance. According to MP3EI, realization of investment in plantation sector has reached 2.29 percent in march 2013 which was still below of target. This research aimed to analyze determinants of foreign direct investment conducted vector error correction model analysis and formulated strategies by using SWOT matrix to increase Indonesia plantation sector. Variables used in this model were foreign direct investment, exports value, exchange rates, domestic interest rates, interest rates in United State of America, consumer price index, gross domestic product and crisis as dummy variable. The strategy alternatives were formulated by SWOT model based on the questionnaire and respondents interview designed in analytical hierarchy process framework. The result from model suggested that in the short term exchange rate, value of exports, United States interest rates, gross domestic product and consumer price index had positive impact to foreign direct investment. On the other side crisis had negative impact. Meanwhile in long term, domestic interest rates, gross domestic product and consumer price index had positive impact but crisis had negative contribution. The strategy priority to increase foreign direct investment in Indoensia plantation sector can be undertaken through harmonization between central and local governments regulations. Keywords: Foreign Direct Investment, Vector Error Correction Model, SWOT Matrix

This study investigates the impact of oil price volatility on economic growth in the United States, while also considering the roles of unemployment rates, interest rates, and inflation. Using a comprehensive dataset and employing various statistical techniques, including summary statistics, correlation analysis, and regression modeling, the study aims to elucidate the relationships between these macroeconomic variables and economic growth. The summary statistics reveal significant variability in oil price volatility, unemployment rates, interest rates, and inflation, all of which influence the economic landscape. The correlation analysis indicates positive associations between GDP and oil price volatility, interest rates, and inflation, while highlighting negative correlations with unemployment rates. The regression analysis further demonstrates that oil price volatility and unemployment rates have statistically significant negative effects on economic growth, whereas interest rates and inflation do not exhibit significant direct effects in the model. The findings underscore the critical impact of oil price stability and labor market conditions on economic performance. Based on these insights, the study recommends policies to mitigate oil price volatility, enhance labor market stability, and foster economic diversification. The results contribute to a deeper understanding of the factors influencing economic growth and offer actionable recommendations for policymakers aiming to promote sustainable economic development

The purpose of this study is to examine the impact of climate change on the plantation sector, service sector, banking sector, and trade or manufacturing sector from a profitability perspective through net profit margin. The research method is descriptive and qualitative, analyzing 6 companies in 4 sectors over the period of 2019-2023, with a total of 30 samples. The findings show that climate change does not affect the telecommunications sector as it is able to stabilize sales, thus impacting profitability. The banking sector is insignificantly affected by climate change due to its ability to minimize risks when granting loans to creditors effectively. However, climate change significantly impacts the palm oil plantation and trade sectors, especially fertilizer trade, due to supply chain disruptions and price increases caused by environmental effects. This leads to decreased productivity from the pressure of raw material price fluctuations, market demand, and rising operational costs. One way to mitigate this is through adaptation strategies, including the implementation of green technologies and operational efficiency to sustain profitability. Both internal and external factors contribute to the company’s ability to generate proportional profits with increased revenue, achieving an optimal net profit margin and supporting the realization of a Gold Indonesia in 2045.

Research background: The relationship between inflation rate, unemployment rate, interest rate and real gross domestic product per capita in Nigeria. However, there seems to be a short-run or long-run relationship among the macroeconomic variables. Purpose: This study investigated the long and short run impacts of the inflation rate, unemployment rate and interest rate on real gross domestic product per capita (RGDPPC) (proxy for economic growth). Research methodology: This study applied a linear dynamic model Autoregressive Distributed Lag (ARDL) modeling technique to analyze the short-run dynamics and long-run relationship of economic growth in Nigeria over the sample period between 1984 and 2017 using annual secondary data extracted from the World Bank Development Indicators Report. Results: The empirical results showed that there was a long-run relationship between the inflation rate, unemployment rate and interest rate on real gross domestic product per capita (proxy for economic growth) in Nigeria. The results further revealed that only the unemployment rate had a significant positive impact on real gross domestic product per capita in the long-run and the inflation rate had a significant negative impact on real gross domestic product per capita in the short-run. Novelty: Therefore, the study concluded that the unemployment rate and inflation rate proved to have significant impacts on economic growth in the long-run and short-run respectively. The formulation of policies to reduce unemployment through the adoption of a labour concentrated technique of production, entrepreneurship development and policy to keep the inflation rate a single digit.

This study aims to systematize and explain the effect of monetary and fiscal Policy on inflation, economic growth and unemployment rate in Indonesia. This type of research is quantitative research, the data used is secondary data which is analyzed using VAR/VECM. The estimation results show that (1) In the long term, interest rate has negative and significant effect on inflation. In short term, interest rate has positive and significant effect on inflation. (2) Government expenditure has insignificant effect on inflation both in long and short term. (3) Interest rate has negative and significant effect on economic growth both in long and short term. (4) Government expenditure has positive effect on economic growth only significant in long term. (5) Interest rate has positive effect on unemployment rate only significant in long term. (6) Government expenditure has negative and insignificant effect on unemployment rate both in long and short term.

This paper aims to explore the impact of the exchange, interest, & inflation rates on economic growth in the Arab Republic of Egypt during the period (2013-2016). In order to meet the study’s goals, a descriptive analytical approach was adopted. The paper uses multiple regression analysis to model the relationship between the dependent variable and the independent variables. The paper found that the exchange rate has a statistically significant impact on economic growth in Egypt. In addition, it was found that the interest and inflation rates don’t have any statistically significant impact on economic growth in Egypt. It was also found that the (exchange, interest, and inflation rates) jointly do not have any statistically significant impact on economic growth in Egypt. Keywords : Exchange Rate, Interest Rate, Inflation Rate, Economic Growth, Egypt. DOI : 10.7176/JESD/10-12-06 Publication date :June 30 th 2019

The interest rate is the amount of interest paid by a borrower to a lender and is set by the central bank of a certain country. Interest rate is regarded as a key variable affecting savings and investment. The interest rate which is set by the central bank is called the base rate. The base rate affects the aggregate output. Thus, the study examined the effect of interest rates on economic growth in Bangladesh. The study did a literature review to have an overview of what others found regarding the effect of interest rates on economic growth. Based on the findings of the study, it was revealed that interest rates affect economic growth. The reduction of interest rates increases economic growth. If the interest rate is good, it keeps output growth high. The study discovered that low rates of interest help the economy grow since people can get more money to make purchases and invests in businesses, thus spurring economic growth. Access to loans from financial institutions depends on interest rates. A country cannot grow if the cost of borrowing is very high and this is significantly influenced by the interest rates. The study also noted that when the base rate increase, the interest rates from the financial institution also increases. Hence, interest rates affect the economic growth in Bangladesh. High rates tend to reduce the pace of economic development. The research concluded that interest rates should be made at a reasonable rate to spur economic growth. The study recommended that the central bank in Bangladesh, Bangladesh Bank, should develop policies and frameworks that will ensure the interest rates are key as low as possible. The government needs to embrace policies that will aid Bangladesh control interest rates and raise money circulation in the economy. Keywords: Interest Rates, Economic Growth, Bangladesh

The role of the interest and exchange rates in sustaining economic growth has been a highly researched subject. Therefore, this study examines the influence of the monetary policy interest rate, the real exchange rate and the business climate in the Euro area on the economic growth in Romania. For this purpose, we have applied a pre-test for structural breaks to identify the existence of structural breaks, followed by the traditional unit root tests and the unit root tests with structural breaks to verify the stationarity of the variables. The results of the Bound cointegration test led to the autoregressive distributed lag (ARDL) short-run model that measures the short-run impact of the interest rate, exchange rate and the business climate in the Euro area on the economic growth of Romania. Our findings show that in the short run, the economic growth is negatively influenced by the interest rate, and positively by the exchange rate. We also indicate that the business climate in the Euro area has mixed effects on the economic growth. Finally, considering the growing interdependence between the internal and external (European) business environment, the results are highly significant for handling the interest and exchange rates in sustaining economic growth.

Germany in a Changing World

The Economy and Suicide.