Monetary and Fiscal Policy on Handling Inflation in Indonesia

Abstract

The steadiness of a country’s economy can be seen from the expansion rate. The reason for this study is to analyze the impact of cash circulation on expansion and the foremost compelling arrangements for swelling issues in Indonesia, utilizing time arrangement information in 2010-2019 and utilizing the Vector Error Correction Model (VECM) show. The results found that the money supply and assess incomes impact swelling and there’s a one-way causality relationship. For variable intrigued rates don’t affect each other’s expansion. The comes about of the causality test too appeared that intrigued rates don’t affect each other on the variable sum of cash supply, as well as the variable charge receipts don’t influence each other on the variable sum of cash supply. The clarification of the VECM show gauges for the most part demonstrates the presence of long-term connections and short-term connections of each variable.