The Dynamics of Monetary Policy and Economic Growth in Indonesia

Abstract

Sustainable and inclusive economic growth is Indonesia's primary goal. Monetary policy plays a crucial role in achieving this objective. This study analyzes the dynamics of monetary policy and its impact on economic growth in Indonesia through a comparative review of six previous studies. The research method used is descriptive qualitative with a library research and comparative review approach. Secondary data were collected from various sources, such as journals, articles, official reports, and internet data, and then analyzed using content analysis and comparative analysis. The research findings demonstrate that the effectiveness of monetary policy heavily depends on the instruments used (money supply, interest rates, inflation, exchange rates), national and regional economic conditions, and coordination between monetary and fiscal policies. The reviewed studies show significant differences in the effectiveness of monetary policy instruments, emphasizing the importance of a more targeted and specific approach according to the economic characteristics of each region. It was observed that regions with diverse economies are more responsive to monetary policy than resource-based regions. Close coordination of monetary and fiscal policies, as well as adaptation to global challenges, is also crucial. In essence, contextual, integrated, and data-driven monetary policies are needed for inclusive and sustainable economic growth. Based on this analysis, it is recommended to integrate regional factors in policy formulation, strengthen coordination between monetary and fiscal policies, and enhance adaptation to global challenges.