EAS Publisher | The Effect of Fiscal and Monetary Policy on Economic Growth in Indonesia

The Effect of Fiscal and Monetary Policy on Economic Growth in Indonesia

DOI : https://doi.org/10.36349/EASJEBM.2020.v03i06.002

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This study aims to see the effect of fiscal and monetary policy on output growth in Indonesia. This study uses secondary time series data from 1975-2017. The analytical tool used is VECM. With a significance level of 5 percent, it shows that fiscal policy in the form of taxes and government spending is proven to influence Indonesia's GDP while monetary policy influences economic growth through export variables. Therefore, the government is expected to control taxes, government expenditure and net exports so that economic growth is guaranteed to be stable.

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Lecturer, Dept. of Pharmacology and Therapeutics, Shaheed Monsur Ali Medical College & Hospital, Uttara, Dhaka-1230, Bangladesh

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