Article Sidebar

Vol. 22 No. 1 (2024): Jurnal Ekonomi Pembangunan
Submitted
February 4, 2024
Accepted
May 14, 2024
Published
June 21, 2024
Download
pdf
Statistic
Read Counter : 471 Download : 402

Downloads

Download data is not yet available.

Main Article Content

Abstract

This study investigates the impact of money, interest rates, and corruption on inflation in Indonesia. This data was obtained from Transparency International and the World Bank from 1995 to 2022. The Auto Regressive Distributed Lag (ARDL) model will be utilized as the estimation method. These findings reveal significant long-term relationships between the variables studied. In the long run, inflation in Indonesia is largely determined by corruption, interest rates, and the money supply. Apart from that, this significant influence is also found in short-term estimation results with different relationships. A decrease in CPI (high corruption) increases the inflation rate significantly, and vice versa. This demonstrates how crucial it is to set up strategies and policies to keep the inflation rate stable for a sustainable economy that doesn't just rely on financial tools but also lessens the likelihood of government-caused corruption and sources of income.

Keywords

inflation corruption interest rate money supply ARDL

Article Details

License
Creative Commons License

This work is licensed under a Creative Commons Attribution-ShareAlike 4.0 International License.

Authors who publish with this journal agree to the terms:

Authors retain copyright and grant the journal right of first publication with the work simultaneously licensed under a Creative Commons Attribution-ShareAlike 4.0 International License that allows others to share the work with an acknowledgement of the work's authorship and initial publication in this journal.

Creative Commons License

Jurnal Ekonomi Pembangunan is licensed under a Creative Commons Attribution-ShareAlike 4.0 International License..

How to Cite
Kurniasih, C. E., Budiartiningsih, R., Sari, L., Aulia, A. F., Aqualdo, N., & Zuryani, H. (2024). Unraveling the Dynamic Impact of Money Supply, Interest Rates, and Corruption on Inflation: Evidence from Indonesia. Jurnal Ekonomi Pembangunan, 22(1), 1–12. https://doi.org/10.29259/jep.v22i1.23052
Download Citation
Endnote/Zotero/Mendeley (RIS)
BibTeX

References

  1. Adayleh, R. M. (2018). Determinant of inflation in Jordanian economy: FMOLS approach. Journal of Internet Banking and Commerce, 23(2), 1–19.
  2. Ahmed, F., Ismail, F., & Jan, M. F. (2018). Nexus between Corruption and Macroeconomic Indicators in Lower Developing Countries. Asia Proceedings of Social Sciences, 2(2), 89–93. https://doi.org/10.31580/apss.v2i2.354
  3. Ali, M. S. Ben, & Sassi, S. (2015). The corruption-inflation nexus: Evidence from developed and developing countries. B.E. Journal of Macroeconomics, 16(1), 125–144. https://doi.org/10.1515/bejm-2014-0080
  4. Altaee, H. H. A., Al-Jafari, M. K., & Saeed, S. T. (2019). Revisiting the determinants of inflation in Iraq utilizing the ARDL approach. Journal of Advanced Research in Dynamical and Control Systems, 11(9 Special Issue), 182–188. https://doi.org/10.5373/JARDCS/V11/20192553
  5. Amaefula, C. G. (2016). Long-Run Relationship between Interest Rate and Inflation: Evidence from Nigeria. IOSR Journal of Economics and Finance, 7(3), 24–28. https://doi.org/10.9790/5933-0703012428
  6. Aprileven, H. P. (2017). Pengaruh Faktor Ekonomi Terhadap Inflasi Yang Dimediasi Oleh Jumlah Uang Beredar. Economics Development Analysis Journal, 4(1), 32–41. https://doi.org/10.15294/edaj.v4i1.14799
  7. Ayodeji, I. O. (2020). Panel logit regression analysis of the effects of corruption on inflation pattern in the Economic Community of West African states. Heliyon, 6(12)., 1-10. https://doi.org/10.1016/j.heliyon.2020.e05637
  8. Buthelezi, E. M. (2023). Impact of Money Supply in Different States of Inflation and Economic Growth in South Africa. Economies, 11(2), 1-22. https://doi.org/10.3390/economies11020064
  9. Egilsson, J. H. (2020). How raising interest rates can cause inflation and currency depreciation. Journal of Applied Economics, 23(1), 450–468. https://doi.org/10.1080/15140326.2020.1795526
  10. Elfrida, F., & Oktaviani, D. (2015). Pengaruh Indeks Persepsi Korupsi, Kebijakan Moneter Dan Fiskal Terhadap Fundamental Ekonomi Makro Di Indonesia. Media Ekonomi, 23(2), 121–134. https://doi.org/10.25105/me.v23i2.3324
  11. Elkamel, H. (2019a). Corruption and inflation: evidence from US states. Journal of Financial Economic Policy, 11(2), 251–262. https://doi.org/10.1108/JFEP-05-2018-0081
  12. Elkamel, H. (2019b). The effect of corruption, seigniorage and borrowing on inflation. PSU Research Review, 3(1), 1–15. https://doi.org/10.1108/PRR-08-2017-0036
  13. Firman, F., & Munim, F. (2022). Corruption and Economic Growth in ASEAN-5 Countries. Jurnal Ekonomi Pembangunan, 20(1), 25–38. https://doi.org/10.29259/jep.v20i1.16131
  14. Gouvea, R., Li, S., & Vora, G. (2019). Corruption and Levels of Economic Development: A Cross-Country Assessment with Special Reference to Africa. Modern Economy, 10(09), 2063–2084. https://doi.org/10.4236/me.2019.109130
  15. Inim, V., Samuel, U. E., & Prince, A. I. (2020). Other determinants of inflation in Nigeria. European Journal of Sustainable Development, 9(2), 338–348. https://doi.org/10.14207/ejsd.2020.v9n2p338
  16. Islam, R., Ferdous, R., Sultana, N., & Nomi, M. (2022). Major Macroeconomic Determinants of Inflation in Bangladesh: An ARDL Bound Test Approach. Economics, 11(4), 200–210. https://doi.org/10.11648/j.eco.20221104.14
  17. Margaryan, A., & Terzyan, H. (2023). Interaction of Inflation and Corruption in Developing Markets in the Context of Technological Changes. Economic Annals-XXI, 203(5-6), 16-24. https://doi.org/10.21003/ea.V203-02
  18. Mbagwu, O. N. (2023). Inflationary Trends and Its Determinants in Nigeria. Acman: Accounting and Management Journal, 3(1), 1–14. https://doi.org/10.55208/aj.v3i1.63
  19. Özşahin, Ş., & Üçler, G. (2017). The consequences of corruption on inflation in developing countries: Evidence from panel cointegration and causality tests. Economies, 5(4), 1-15. https://doi.org/10.3390/economies5040049
  20. Peixoto, P., Martinho, V. J. P. D., & Mourao, P. (2022). Corruption and Inflation in Agricultural Production: The Problem of the Chicken and the Egg. Economies, 10(11), 1–33. https://doi.org/10.3390/economies10110268
  21. Pesaran, M. H., Shin, Y., & Smith, R. J. (2001). Bounds Testing Approaches to The Analysis of Level Relationships. Journal Applied Econometrics, 16(3). https://doi.org/10.1002/jae.616
  22. Prihatmanto, H. N., Munajat, M. D. E., & Irawati, I. (2023). Detecting the Corruption Pattern and Measuring the Corruption Detection Pace at the Indonesian Village Level . Jurnal Tata Kelola Dan Akuntabilitas Keuangan Negara, 9(2), 289–308. https://doi.org/10.28986/jtaken.v9i2.1361
  23. Sassi, S., & Gasmi, A. (2017). The Dynamic Relationship Between Corruption–Inflation: Evidence From Panel Vector Autoregression. Japanese Economic Review, 68(4), 458–469. https://doi.org/10.1111/jere.12134
  24. Sidiq, M. A. N. ., & Wahyuni, M. (2024). Crisis of Mega-Corruption on the Eve of Indonesian General Elections: Its Implications for The Quality of Elected Governance. Bestuurskunde: Journal of Governmental Studies, 4(1), 43–57. https://doi.org/10.53013/bestuurskunde.4.1.43-57
  25. Smauel, U. E., Udoh, B. E., Prince, A. I., Infeanyi, O. J., & Ndu, O. M. (2019). View of Money Supply and Inflation Rate in Nigeria: The Missing Link. Humanities and Scocial Sciences Letters, 7(3), 156–166. https://doi.org/10.18488/journal.73.2019.73.156.166
  26. Tolasa, S., Whakeshum, S. T., & Mulatu, N. T. (2022). Macroeconomic Determinants of Inflation in Ethiopia: Ardl Approach To Cointegration. European Journal of Business Science and Technology, 8(1), 96–120. https://doi.org/10.11118/ejobsat.2022.004
  27. Transparency International. (2021). The ABCS of the CPI: How The Corruption Perceptions Index Is Calculated. Transparency International. https://www.transparency.org/en/news/how-cpi-scores-are-calculated
  28. Transparency International. (2023). Data the Corruption Perception Index. Transparency International. https://www.transparency.org/en/cpi/2022
  29. Uddin, I., & Rahman, K. U. (2023). Impact of Corruption, Unemployment and Inflation on Economic Growth Evidence from Developing Countries. Quality & Quantity, 57(3), 2759-2779. https://doi.org/10.1007/s11135-022-01481-y
  30. World Bank. (2023). Data Inflation, Interest Rate and Broad Money in Indonesia. World Bank Group. https://data.worldbank.org/country/i

Similar Articles

<< < 1 2 3 4 > >> 

You may also start an advanced similarity search for this article.