Monetary and fiscal policies boost Indonesia's business cycle resilience.
The study looked at how money-related factors like money supply and exchange rates, as well as government spending and taxes, affect the economy in Indonesia. They used data from 1970 to 2017 and a special model to analyze the connections between these factors and the business cycle. The results showed that in the long term, both monetary and fiscal factors have a positive impact on the economy. However, in the short term, only the amount of money circulating in the economy has a significant effect. Overall, the way Indonesia combines monetary and fiscal policies seems to be working well.