Abstract
This paper examines the relationship between Exchange rates, GDP, and Government expenditure as macroeconomic variables on the Inflation of Indonesia which is quite 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 5.47% which is above the target set by the central bank of Indonesia of 2-4%. With the data taken from 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.
Talk to us
Join us for a 30 min session where you can share your feedback and ask us any queries you have
More From: Business Economic, Communication, and Social Sciences Journal (BECOSS)
Disclaimer: All third-party content on this website/platform is and will remain the property of their respective owners and is provided on "as is" basis without any warranties, express or implied. Use of third-party content does not indicate any affiliation, sponsorship with or endorsement by them. Any references to third-party content is to identify the corresponding services and shall be considered fair use under The CopyrightLaw.