The impact of monetary policy on achieving economic stability Indonesia: A case study for the period 1990-2025

Abstract

The research aims to use appropriate monetary policy to maintain a targeted inflation rate within single digits and a natural unemployment rate by studying the impact of certain monetary variables on inflation and unemployment rates in Indonesia. It was hypothesized that monetary policy has a positive effect on achieving a level of economic stability in Indonesia, relying on the inductive method to prove the research hypothesis. The study concluded that there are positive effects of monetary policy in achieving economic stability, especially in the long term, as confirmed by the R-squared value of the first model being 78%, while the second model's value was 82%. In the short term, the values were 74% and 80%, respectively.