Electronic Theses and Dissertation

Abstract title : the influence of monetary policy on inflation in indonesia author : vinca grace sihombing nim : 2001101010060 faculty / department : economics and business / development economic supervisor : fitriyani, s.e., m.sc this study employs the autoregressive (ar) method to investigate the intricate relationship between money supply, a crucial intermediate target, and inflation rate, a primary final target, in indonesia. utilizing monthly time series data spanning from 2005 to 2022, the study reveals compelling results. the autoregressive terms (ar(1) and ar(2)) demonstrate statistically significant coefficients, unveiling the persistence and lagged effects of inflation on the current inflation rate. specifically, a positive autocorrelation at lag 1 (ar(1)) indicates that recent inflation influences the current rate positively, while a negative autocorrelation at lag 2 (ar(2)) suggests a dampening effect from inflation two periods ago. these findings enhance our understanding of how monetary policy, especially variations in money supply, shapes inflation dynamics in indonesia. policymakers can leverage these insights to formulate effective strategies for inflation management in the nation's economy. keywords: monetery policy, money supply and inflation rate.