Electronic Theses and Dissertation

Universitas Syiah Kuala

SKRIPSI

THE INFLUENCE OF MONETARY POLICY ON INFLATION RATE IN INDONESIA

Pengarang

Dosen Pembimbing

Fitriyani - 199204122018032001 - Dosen Pembimbing I
Suriani - 197505062006042001 - Penguji
Putri Bintusy Syathi - 197602202003122001 - Penguji

Nomor Pokok Mahasiswa

2001101010060

Fakultas & Prodi

Fakultas Ekonomi dan Bisnis / Ekonomi Pembangunan (S1) / PDDIKTI : 60201

Subject

Kata Kunci

Penerbit

Banda Aceh : Ekonomi Pembangunan., 2024

Bahasa

No Classification

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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.