The Effect of Interest Rates, Consumption, Investment, and Inflation on GDP in Indonesia

Abstract

This study aims to determine the effect of interest rates, consumption, investment, and inflation on gross domestic product (GDP) in Indonesia. The variables in this study are interest rates, consumption, investment, and inflation as independent variables, while the Gross Domestic Product (GDP) variable is the dependent variable. The research period is from 1993-2023. The data analysis technique used is the Autoregressive Distributed Lag (ARDL) panel. When viewed from the short run and log run, the Interest Rate variable at lag-0, lag-2 Interest Rate and lag-3 Interest Rate have a significant effect on GDP, while lag-1 Interest Rate has no significant effect on GDP in the short term. Interest Rate variable has no significant effect on GDP in the long run. Consumption lag-2 variable has a significant effect on GDP. while Consumption lag-0 and Consumption lag-1 have no significant effect on GDP in the short term, Consumption variable has no significant effect on GDP in the long term. Investment lag-0 and Investment lag-3 variables have a significant effect on GDP, while Investment lag-1 and Investment lag-2 have no significant effect on GDP in the short term. In the Investment variable has a significant effect on GDP in the long term. Inflation variable has a significant effect on GDP in the short term, while Inflation variable has no significant effect on GDP in the long term.