E. Sumarminingsih, W.H. Nugroho
The purpose of this study is to examine the relationship between rate of inflation, interest rates and the money supply. Statistical Methods to be used in assessing the linkages of inflation rates, interest rates and the money supply is a model of Vector Autoregressive (VAR). The conclusion of this study is Classical Theory is not applicable in full in Indonesia but only partially. Part of the classical theory that is applicable in Indonesia is there is a negative relationship between inflation rate and the Interest Rate. While the relationship between the inflation rate and the money supply is not proved in Indonesia. © 2013 by CESER Publications.
Faculty of Mathematics and Natural Sciences, University of Brawijaya, Indonesia
