Monetary and Fiscal Policy on Inflation in Indonesia: Threshold Vector Autoregression Approach
Year: 2025
Type: article
Abstract: The combination of monetary and fiscal policies is used to stabilize prices in Indonesia. The purpose of this study is to analyse the role of monetary and fiscal policies in stabilizing prices in Indonesia through the threshold concept. The data used is time series (2013Q1-2023Q2) with the Threshold Vector Autoregression method. The results show that the interest rate and budget thresholds can affect inflation stability. Other variables, such as the exchange rate, output gap, and FFR, have varying effects depending on the threshold. Thus, combining adjustments in monetary and fiscal policies and understanding the impact of inflation at various policymakers can better manage economic growth and maintain price stability in the long term.
Source: Media Ekonomi dan Manajemen
Authors: Lilis Yuliati, Badara Shofi Dana, Ati Musaiyaroh
Language: English
Domain: Social Sciences
Open Access status: diamond
OpenAlex ID: W4406597877