Long-term Analysis of Inflation, Exports and Exchange Rate of Economic Growth in Indonesia

Cut Sari, Devi Andriyani, Irfan, Khairawati

2019

Abstract

Economic growth is one of the macroeconomic indicators that show the level of welfare of a country. The factors that effect to economic growth is inflation, exports and Exchange Rates. This study aims to analyze the effect of Inflation, Exports and Exchange Rates to Economic Growth in the long run. Data collecting used documentation. Data were analyzed using Vector Error Correction Model (VECM) and cointegration test. The results of the study were (1) there is In the short-term estimation only inflation affects economic growth while exports and the exchange rate have no short-term effect on economic growth. The most important thing from the short term equation is the value of error correction. Error Correction coeficient of -0.733053. This shows that the imbalance in economic growth in the current year (2018) will be corrected in the following year by 73.3053%. and (2) there is a long term effect of variabels inflation, exports and exchanger rate to economic growth in Indonesia in 1988-2018. Based on the long-term analysis of the VECM model it is found that inflation and exports negatively affect economic growth. While the exchange rate variable has a positive influence on economic growth. the results of the analysis of an increase in inflation of 1% will have an impact on the decline in economic growth of 3.73178%.export variable has a negative influence which explains that an increase in exports of 1% will reduce economic growth 3,65662%.

Paper Citation

in Harvard Style

Sari C., Andriyani D., Irfan. and Khairawati. (2019). Long-term Analysis of Inflation, Exports and Exchange Rate of Economic Growth in Indonesia. In Proceedings of the 20th Malaysia Indonesia International Conference on Economics, Management and Accounting - Volume 1: MIICEMA, ISBN 978-989-758-582-1, pages 425-433. DOI: 10.5220/0010435300002900

in Bibtex Style

@conference{miicema19,
author={Cut Sari and Devi Andriyani and Irfan and Khairawati},
title={Long-term Analysis of Inflation, Exports and Exchange Rate of Economic Growth in Indonesia},
booktitle={Proceedings of the 20th Malaysia Indonesia International Conference on Economics, Management and Accounting - Volume 1: MIICEMA,},
year={2019},
pages={425-433},
publisher={SciTePress},
organization={INSTICC},
doi={10.5220/0010435300002900},
isbn={978-989-758-582-1},
}

in EndNote Style

TY - CONF

JO - Proceedings of the 20th Malaysia Indonesia International Conference on Economics, Management and Accounting - Volume 1: MIICEMA,
TI - Long-term Analysis of Inflation, Exports and Exchange Rate of Economic Growth in Indonesia
SN - 978-989-758-582-1
AU - Sari C.
AU - Andriyani D.
AU - Irfan.
AU - Khairawati.
PY - 2019
SP - 425
EP - 433
DO - 10.5220/0010435300002900