The Digital Economy and Usury in Indonesia

This study examines the impact of internet literacy on interest rates, consumption and economic growth.This study analyzes 21 years of data, from 2000 to 2020, to create "autoregressive vectors" to evaluate the causal relationship between variables. The following multivariate regression model was used to analyze the causal relationship between internet literacy, interest rates, consumption, and economic development in Indonesia, based on secondary data from the World Bank. We found that internet literacy has an impact on consumption and economic growth in Indonesia but does not have a significant impact on interest rates. This shows that internet technology penetration has no significant effect on interest rates but does affect consumption and economic growth. The level of interest rates itself encourages domestic consumption but suppresses economic growth. This becomes rational because the ease of credit makes it easier for people to consume but becomes a burden from economic growth.