Macroeconomic Variables and The Growth of E-money on Inflation in Indonesia

Regina Niken Wilantari, Eddy Priyanto


Abstract: This study aims to determine whether or not there is an influence between macroeconomic variables and the growth of e-money on inflation in Indonesia in the short and long term. Macroeconomic variables in this study consist of exchange rates, interest rates, and economic growth variables. The method used in this study is the Error Correction Model (ECM), using a monthly data time period from January 2009 to December 2017. The results of this study indicate that in the short term only the interest rate and economic growth variables have a positive and significant effect on inflation in Indonesia, and only has a negative and insignificant effect on the money growth variable. However, in the long run, all independent variables, namely exchange rates, interest rates, economic growth and e-money growth have an influence positive and significant impact on inflation in Indonesia. The results of each independent variable on inflation differ depending on the economic conditions that occurred in Indonesia in the year concerned.

Keywords: Macroeconomic Variables, E-Money Growth, ECM

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