Comparison of Inflation and Economic Growth as Monetary Policy Targets In Indonesia Esti Pasaribu (a*) and Novi Tri Putri (a)
a) Faculty of Economics and Bussines, University of Bengkulu Jln WR Supratman, Bengkulu 38121, Indonesia
*estipasaribu[at]unib.ac.id
Abstract
The purpose of this research is to examine the effectiveness of Indonesian monetary policy from 2002 to 2023 by comparing the ultimate target of Indonesian monetary policy as a measure of the effectiveness of the transmission mechanism in this research, which is GDP and Inflation. The data used in this study is secondary data, and the form of data is quarterly data. Gross Domestic Product (GDP), inflation rate, BI Rate, and money supply are among the time series data. The Multiple Linear Regression analysis tool was used in this study to examine how the real sector responds to government policies in the long term. As a result, monetary policy has a faster response in GDP than the target inflation rate. Therefore, the Indonesian Monetary Authority, Bank Indonesia, will be able to maintain the stability of the interest rate (BI Rate) and increase the money supply in society to encourage increased economic growth in Indonesia. Bank Indonesia is expected to maintain the stability of interest rates and control the money supply to help maintain the stability of the inflation rate in Indonesia.
