Money Supply and Interest Rates Drive Inflation in Indonesia, Government Spending Ineffective
The study looked at how money supply, interest rates, and government spending affect inflation in Indonesia from 1995 to 2016. They used data from the Central Bank of Indonesia, Central Bureau Statistic, and International Monetary Fund, and analyzed it using Ordinary Least Square method. The results showed that money supply and interest rates have a significant impact on inflation in Indonesia, while government spending does not. The study found that 60.8% of the variation in inflation can be explained by these three factors.