Proceedings of the 1st International Conference on Economics, Management, Accounting and Business, ICEMAB 2018, 8-9 October 2018, Medan, North Sumatra, Indonesia

Research Article

Impact of Monetary Instrument Shock Against Inflation in North Sumatra: Two-Stage Least Square Method

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  • @INPROCEEDINGS{10.4108/eai.8-10-2018.2289252,
        author={Nelly  Hutajulu and Fitrawaty  Fitrawaty and Muhammad Fitri Rahmadana},
        title={Impact of Monetary Instrument Shock Against Inflation in North Sumatra:  Two-Stage Least Square Method},
        proceedings={Proceedings of the 1st International Conference on Economics, Management, Accounting and Business, ICEMAB 2018, 8-9 October 2018, Medan, North Sumatra, Indonesia},
        publisher={EAI},
        proceedings_a={ICEMAB},
        year={2019},
        month={11},
        keywords={inflation gross domestic product (gdp) money supply interest rate of bank indonesia exchange rate unemployment two-stage least square (2sls)},
        doi={10.4108/eai.8-10-2018.2289252}
    }
    
  • Nelly Hutajulu
    Fitrawaty Fitrawaty
    Muhammad Fitri Rahmadana
    Year: 2019
    Impact of Monetary Instrument Shock Against Inflation in North Sumatra: Two-Stage Least Square Method
    ICEMAB
    EAI
    DOI: 10.4108/eai.8-10-2018.2289252
Nelly Hutajulu1,*, Fitrawaty Fitrawaty1, Muhammad Fitri Rahmadana1
  • 1: Department of Economics, Faculty of Economics, State University of Medan, North Sumatra, 20219, Indonesia
*Contact email: nellyhutajulu@yahoo.co.id

Abstract

The study explores the relationship among inflation and economic growth in North Sumatra. Two-Stage Least Square (2SLS) technique is used to analyze the impact of monetary instrument shock against inflation the period of 1994-2017. The result of research concludes that economic growth effect significantly to inflation in North Sumatra and positive direction. The amount of money in circulation, the money supply previous period a significant and negative effect against inflation in North Sumatra. interest rate of Bank Indonesia, unemployment is a significant and positive effect against inflation in North Sumatra. Inflation has no effect on against the economic growth of North Sumatra. The amount of money in circulation, a significant and positive effect toward economic growth in North Sumatra. While the money supply previous period does not affect economic growth in North Sumatra