Aprilia, Elisa and Hidayat, Ariodillah and Asngari, Imam (2024) Causality Between Exchange Rates, Economic Growth and Inflation in Indonesia. Management and Economics Review, 57 (1). pp. 36-52.
![[thumbnail of Causality Between Exchange Rates, Economic Growth and Inflation in Indonesia (1).pdf]](http://repository.unsri.ac.id/style/images/fileicons/text.png) |
Text
Causality Between Exchange Rates, Economic Growth and Inflation in Indonesia (1).pdf Download (5MB) |
Abstract
The primary objective of this study is to examine the causal relationships among exchange rates, economic growth, and inflation in Indonesia. The data used in this research is secondary data with time series data for the period 2000 to 2019, obtained from the Bank Indonesia, Indonesia Central Bureau of Statistics, and World Bank. The method used in this research is Granger Causality. The outcomes of the analysis reveal a bidirectional causal relationship between economic growth and the exchange rate in the short term, as well as between inflation and the exchange rate. An appreciation of a country's exchange rate of one percent has an impact on changes in the overall price of goods, while an increase in the inflation rate causes a depreciation of the exchange rate. The relationship between inflation and economic growth shows that there is a one-way causal relationship, namely that inflation affects economic growth but not vice versa. These findings have significant policy implications, indicating that the Indonesian government needs to prioritize efforts to control inflation to support sustainable economic growth. Therefore, it is necessary to implement appropriate monetary and fiscal policies to maintain price stability and encourage balanced economic growth in Indonesia.
| Item Type: | Article |
|---|---|
| Uncontrolled Keywords: | exchange rate, economic growth, granger causality, inflation |
| Subjects: | H Social Sciences > HD Industries. Land use. Labor > HD72-88 Economic growth, development, planning |
| Divisions: | 01-Faculty of Economics > 60201-Development Economics (S1) |
| Depositing User: | ariodillah hidayat ario hidayat |
| Date Deposited: | 19 Jun 2025 05:13 |
| Last Modified: | 19 Jun 2025 05:13 |
| URI: | http://repository.unsri.ac.id/id/eprint/175570 |
Actions (login required)
 |
View Item |