THE RELATIONSHIP OF MONETARY POLICY INSTRUMENTS IN THE INDONESIAN ECONOMY
Indra Maipita, Fitrawaty

Universitas Negeri Medan

Abstract

The implementation of monetary policy cannot be carried out separately from other macroeconomic policies. This is especially true considering the very close interdependence or link between monetary policy and other parts of macroeconomic policy. Understanding the interdependence between monetary instruments is very necessary for policy makers to avoid deviations or economic distortions. The research aims to analyze the interdependence of monetary policy instruments in the Indonesian economy during the period 2000 - 2023. The data used is time series data obtained from BI, BPS and other related agencies, using the Vector Auturegression (VAR) model followed by Structural Vector Auturegression (SVAR), which predicts how monetary instruments are related in Indonesia. Shocks are carried out on monetary instruments in order to predict their impact on the economy and find out what impact the shock will have in the short, medium and long term. The research results show that there is a link between monetary policy instruments in achieving economic goals in Indonesia

Keywords: Monetary Policy Instruments, VAR, Indonesian Economy

Topic: Economics and Social Education