Research Article
The Relationship of Monetary Policy Instruments in the Indonesian Economy
@INPROCEEDINGS{10.4108/eai.17-9-2024.2352893, author={Indra Maipita and Fitrawaty Fitrawaty}, title={The Relationship of Monetary Policy Instruments in the Indonesian Economy}, proceedings={Proceedings of the 6th International Conference on Innovation in Education, Science, and Culture, ICIESC 2024, 17 September 2024, Medan, Indonesia}, publisher={EAI}, proceedings_a={ICIESC}, year={2025}, month={1}, keywords={monetary policy instruments var indonesian economy}, doi={10.4108/eai.17-9-2024.2352893} }- Indra Maipita
Fitrawaty Fitrawaty
Year: 2025
The Relationship of Monetary Policy Instruments in the Indonesian Economy
ICIESC
EAI
DOI: 10.4108/eai.17-9-2024.2352893
Abstract
The implementation of monetary policy is closely intertwined with other macroeconomic policies due to the substantial interdependence between monetary policy and broader economic management. Recognizing these connections is critical for policymakers in order to prevent economic imbalances or distortions. This study aims to investigate the interrelationship between monetary policy instruments within the context of the Indonesian economy from 2000 to 2023. Utilizing time series data sourced from Bank Indonesia (BI), the National Statistics Agency (BPS), and other relevant institutions, the research employs the Vector Autoregression (VAR) model, followed by Structural Vector Autoregression (SVAR), to analyze the dynamics between monetary instruments in Indonesia. By introducing shocks to these instruments, the study seeks to predict their effects on the economy and assess their impact across short, medium, and long-term periods. The findings demonstrate a strong correlation between monetary policy tools, highlighting their pivotal role in achieving Indonesia’s economic goals.
