ANALISIS HUBUNGAN KORELASI INFLASI TERHADAP PERTUMBUHAN EKONOMI DI INDONESIA

Abstract

This study examines the correlation between inflation and Indonesia's economic growth. These two macroeconomic indicators are considered as the driving factors of the country's economy, especially developing countries. The purpose of this study is to determine the correlation of inflation and economic growth in Indonesia among three time decades: the first decade 1994-2003, the second decade 2004-2013, the third decade 2014-2023. The division of three decades is important because the relationship between inflation and economic growth is expected to change every ten years by things such as government policies, economic, and global conditions. The data used in the study is secondary time series data in the form of quarterly data obtained through CEIC with a research time span of 1994- Q1 to 2023-Q4. This study uses Pearson correlation and Ordinary Least Square (OLS) analysis methods. The results show that inflation has a complex effect on the Indonesian economy. In the crisis period, high inflation contributed to a significant economic recession. However, in periods of greater stability, even if inflation persists, appropriate policies can help maintain positive growth.