The Impact of Monetary Targets on The Performance of The Manufacturing Industry Sector in Indonesia 1991 – 2021
Abstrak
The Monetary Targets appears to give an influence in the output of the Manufacturing Industry. This study aims to look at the relationship between the Monetary Targets on Manufacturing Industry Output in Indonesia in the period 1991 – 2021. The factors that influence Manufacturing Industry Output are viewed from the macroeconomic side which includes monetary targets in the form of Inflation, Interest Rates, Exchange Rates, and Foreign Direct Investment as a control indicator. This study uses secondary data acquired from the World Bank and Central Bureau of Statistics (BPS) in the form of time series data. The analysis in this study uses the Ordinary Least Squares (OLS model) method and conducted using the Eviews 10 software. The results show that there is a positive and significant effect of Exchange Rate on Manufacturing Industry Output. The relationship between the Exchange Rate and the Output of Manufacturing Industry is supported by significant investment by foreign countries as more products are purchased, demand for the product increases, firms are forced to increase their production. Meanwhile, this study did not find any significance between the Inflation and Interest rate on Manufacturing Industry Output. Even though previous studies proved that Inflation does affect the factors of production and the Interest is a consideration for an investor to decide whether it's worthwhile to invest in foreign country.
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Hak Cipta (c) 2024 Journal of Business and Political Economy : Biannual Review of The Indonesian Economy
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