Last modified: 2023-11-20
Abstract
This research aims to determine the effect of inflation and exchange rates on economic growth in Indonesia. The data used in this research is secondary data in the form of a time series for 1991-2021 obtained from the world bank and BPS (Central Statistics Agency). The data analysis method used is the Autoregressive Distributed Lag (ARDL) model, where the condition for using this model is that all variables can be stationary at different levels, so that the model is valid and can be used. The results show that in the short term the inflation variable has a negative and significant effect on economic growth. In the long term, inflation has a negative and significant effect on economic growth. The exchange rate variable has a negative and significant effect on Indonesia's economic growth, in the long term the exchange rate variable has a negative and insignificant effect on Indonesia's economic growth.