EMPIRICAL EVIDENCE ON THE IMPACT OF MONETARY POLICY ON NATIONAL ECONOMIC GROWTH

This article discusses empirical evidence of----imonetary -----ipolicy's impact----ion national----ieconomic growth----i n the decade 2010-2019. This article is analyzed using a regression analysis tool. This article concludes that 1) the interest rate (BI Rate) has----ian---i mpact rate----ion national----ieconomic---igrowth---i n----ithe decade 2010-2019 of only 7 percent. Impact-----iof US $----iexchange----irate---ion----ithe domestic----ieconomic----igrowth---iof only 90 percent 3) Impact of the amount of money in circulation on the national economic growth of only 76.8 percent, 4) Impact----iof----i nflation----irate----ion----ithe domestic economic growth of only 4.3 percent 5) impact of total investment in national economic growth is only 60.8 percent. Thus-----ithe----imain-----iobjective-----iof-----imonetary-----ipolicy is more emphasis-----ion-----iprice-----istability. With the first consideration, with output determined by long-term economic capacity, all systems that encourage economic growth will create inflation so that it will not affect real economic growth. Second, the rational financial agent understands that policymakers' actions in supporting the economic growth that helps increase can lead to time consistency problems. Third, monetary policy influencing economic variables takes a long time and has a lag. Fourth, price stability can encourage creating a better economic climate because it will reduce costs from inflation

In the current era of globalization, where other countries' financial events greatly influence a country's economic activities, external factors will affect the government in determining policies, both fiscal and monetary policies. Cioran (2014) suggested that financial business is an integral part of an economy so that economic growth cannot be analyzed without involving monetary problems.

Interest rate
The interest rate used is the interest rate issuedi ---iby----iBank Indonesia in ithe formi ---iof a Bank Indonesia Certificate (SBI) in recognitioni ----iofi----ishort-term debt (1-3 months) with a discount/interest system. The interesti ---irate is determinedi ----iby---iBank Indonesia toi ----icontrol the stabilityi ----iof the Rupiah value. When selling SBIs, Bank Indonesia cani ----iabsorbi----iexcess base money in circulation. Circulation of money that is too much in the community will cause people to tend to spend their money, which can impact the rising prices of goods, one of which is a trigger for inflation. Raise SBI interest rates, which means banks and financial institutions will be compelled to buy SBIs. The existence of high interest in SBI makes banks and financial institutions enjoy it. This will provide a higher interest rate for their products. High interest will have an impact on the allocation of investment funds for investors. One of the interest rate characteristics is that it changes quickly, which occurs in a relatively short period and has a short period. Long-term interest rates are relatively less volatile (Perlambang, 2012).
The theory that can explain the effecti ----iof interesti ---irates on foreigni ----iexchange----irate changes is the International Fisher Effect (IFE Theory) theory. This theory combines PPP theory with the Fisheri ----iEffecti---itheory discovered by an economisti ----inamed Irving Fisher. According to IFE theory, the value of currencies from countries with high-interest rates or higheri ----ithani---iother countries will experience depreciation. If thei ---idomestic interesti ---irate is higher than the interest rate of a foreign country, the local currency's value will depreciate, while the foreign currency will appreciate it. Exchange rates and interest rates also have close links with the terms Purchasing Power Parity (PPP). This theory isi ----idefinedi---ias the difference in thei ---iprice of the same goods but sold at different rates. This theory explains that changes in relative inflation (the ratio of increase between countries) between two countries must also be balanced by changesi ---ini----ithei----iexchange rate to maintain the equality of goods prices between them.
Money supply can be defined in the narrow sense (M1) and the broad sense (M2). M1 includesi ----icurrency---iheld by the publici ---iand demand deposits (demand deposits denominated in Rupiahs), while M2 covers M1, quasi money (includesi---isavings, time deposits in rupiah andi ---iforeigni----iexchange, and current accounts in foreign currencies), and securities issued by the monetary system. The domestic private sector owns them with a remaining term of up to one year.
According to Nopirin (2000), although in general it can be said thati ---ithei---imoney supply (JUB) can be determined directly by the Central Bank without questioning its relationship with base money, but in reality, JUB in a period is the result of the behavior of thei ---icentrali---ibank, commercial banks (including non-bank financial institutions), the community together. The main factor influencing the amount of money is the minimum reserve, but the total result of the amount of money still depends on the community's attitude. So the central bank is not so easy to regulate JUB because many factors influence it.

Inflation
An economic phenomenon that has never been lost in the long history of the economy is inflation. Where inflation is a discussion that is often discussed because it has an overall impact on the macroeconomy. Rise is an increase in prices in general and continuously (Mankiw, 2003: 145). This does not mean that the costs of various goods have increased by the same percentage, because these increases may not coincide. Therefore inflation is said to occur if the prices of general products increase continuously over a certain period, but if the rise occurs just once, even though a large percentage can not be inflation.
Inflation is an increase in general prices prevailing in an economy from one period to another. The rise can be seen from various levels based on the level of severity and whether, namely mild inflation (<10% per year), moderate increase (10% -30% per year), massive inflation (30% -100% per year), and Hyperinflation (> 100% per year). Meanwhile, if viewed based on the cause, an increase can be classified into four, namely the demandpull (Demand-pull inflation), the driving force of supply (Cost-push inflation), mixed rise (Mixed inflation), and expectations of Inflation (Expectedi ----iInflation).
Inflation will harm economic growth if an increase in inflation occurs, so people will noti ----ilike toi ---ihavei---icash. Therefore, thei ---ireali---ivalue ofi ---imoney held is lower, and the purchasing power of money is more economical. This makesi ---iproducers noti ---ieager to produce because production will not sell because the price increases are too high and consequently the production results will also decrease

Economic growth
Economic growth is the development of the economy by increasing the goods and services produced to increase prosperity for the community (Sukirno, 2010). So the event of an economy can be measured by economic growth. The ability of a countryt oi---iproducei--igoods andi ---iservices will increase fromi ----ione periodi ---itoi---ianother. This increased capability is due to the increase in production factors, both in quantity and quality.
Economic growth can be seen from the increase in Gross Domestic Product (GDP). Economic growth is a critical indicator for analyzing economic development that occurs in a country. Economici ----igrowth is one ofi ---ithei---imany conditions needed in thei ---idevelopment process. Economici ----igrowth by recording an increase in thei ---iproduction---iof----igoods and services that occur nationally.
Economic growth cani ---ibei----imeasured by the Grossi ---iDomestici---iProduct (GDP) growth at constant prices. The pace of GDP growth will show a processi ----iof--oincreasing per capita output in the long run. Emphasis is on the process because it contains dynamic elements, changes, or developments. Therefore understanding economic growth indicators will usually be seen within a specified period, for example, quarterly. The effectiveness of economic policies implemented by the government in encouraging economic activities can be assessed so that these aspects are relevant for analysis.
GDP can be calculated in two ways, namely at current prices and at constant prices. GDP at current prices illustrates the value-added of goods and services calculated using amounts in the year. GDP at regular prices represents the added value of products and services based on costs in a given year or base year. Meanwhile, according to Mankiw (2000), the calculation criteria for GDP can be divided into real GDP and nominal GDP. Practical GDP measures change in physical output in the economy between different periods by valuing all goods produced in the two periods at the same price, or constant prices. While nominal GDP measures the value of output in a period using prices in that period, or often referred to as the prevailing price.

Methodology
This article tries to review and discuss some unresolved issues by providing a quantitative survey using a meta-analysis methodology. A meta-analysis is a systematic approach to analyzing sources of variation (quantitative) in the research results obtained previously. In a previous meta-analysis, De Grauwe and Storti (2004) examined the effects of monetary policy on several variables across countries and found that methodological differences in various studies contributed significantly to financial impact variations.
The data used in this article is secondary data, which is empirical evidence sourced from official government institutions such as the Central Statistics Agency and Bank Indonesia. The data referred to in this article is data on the level of 1) interest rates, 2) the exchange rate of the dollar against the rupiah, 3) the amount of money in circulation 4) the inflation rate 5) the amount of investment and 6) national economic growth. The data analyzed are data in the past decade (2010-2019).
Analysis tools used to answer the problem formulation using growth index analysis tools, stationary tests, and regression tests using eviews and SPSS applications. Eviews application is used for statistic test of each variable and spss application is used for regression test.

Interest rate/BI Rate
The interest rate is one crucial factor that needs to be considered in making investment decisions. According to Bank Indonesia, the interesti ---irate is a cost expressedi ---ias a certain percentage in the framework of borrowing money for a specified period. Determination of the interest rate (BI rate) by Bank Indonesia (BI) is a monetary policy that aims to control Indonesia's inflation rate and, at the same time, provide a signal to investors to invest in the Indonesian capital market. Changes in interest rates (BI rate) as a reference and benchmark for the business and financial world and banking to determine the direction of business goals. This is also used by investors to analyze and assess the purchase and sale of shares by looking at the company's business sector.  Interest rates are one of the most influential factors in the economy of a country besides inflation. Interest rates can affect the balance between public savings and investment in the real sector, further affecting the number of jobs and the unemployment rate. Furthermore, the implications can change people's income. This is usually called the multiplier effect. Therefore, setting interest rates, many consider various factors that will result from setting interest rates.

Exchange rate
The high domestic demand and supply for commodity goods and services abroad require a country to make international relations with other countries. Particularly in the state of Indonesia, which began implementing an open economy since 1969, which is from the very beginning of the implementation of Pelita I, Indonesia's economic interaction with other countries has been developing year after year and is an aspect of the economy that must be considered both in terms of regulations and its implementation system.
In carrying out economic interactions between countries, the existence of a medium of exchange is essential to facilitate the exchange process, as is the process of domestic transfer, but there is a problem of how to measure the price of a country's currency compared to the cost of another country's currency in economic activity. Therefore, the importance of the role of the exchange rate for a country requires various efforts to maintain the position of a country's currency exchange rate in a relatively stable state.
Currency exchange rate stability is also influenced by the exchange rate system adopted by a country. A country that utilizes a fixed exchange rate system must actively intervene in the market so that its currency exchange rate is at the desired level. Whereas a country that uses a floating exchange rate system, a currency exchange rate is entirely left to the strength of foreign exchange demand and supply. The table below is the exchange rate of US $ from 2009 to 2019, which is as follows: Based on the table above it can be seen that the rate of the exchange rate has increased from year to year, where a very high increase occurred from 2012 to 2013 with a rise of 26.04 percent, and the highest exchange rate, namely in 2018 with an exchange rate of 1 US $ = Rp.14,481. The US $ exchange rate on national economic growth is only 90 percent, as stated in the analysis output below: Developing countries are very vulnerable to exchange rate fluctuations. Fluctuations in exchange rates will impact economic growth because it affects the financial balance of banks and companies that have foreign debt denominated in foreign currencies. A sharp exchange rate depreciation will increase external debt in the domestic exchange rate, increasing the possibility of default and crisis. A stable exchange rate system is an essential component for stable and prosperous economic growth. Stability is the main advantage of a fixed exchange rate because the exchange rate between currencies does not change based on market conditions. Therefore, it can create a stable business climate that is profitable for trade and investment. On the other hand, the floating exchange rate allows the central bank to conduct more independent monetary policies, which are very important for controlling the economy.

Amount of Money Circulating
Money in circulation is the amount of currency issued and circulated by the central bank consisting of coins and banknotes, including quasi money or near money, which includes time deposits, savings deposits, and currency accounts (savings deposits) foreign domestic private property. This is because quasi money can be converted into cash, which functions the same as currency.
Money Supply is the monetary system (Central Bank, Commercial Bank, and Rural Credit Bank / BPR) to the domestic private sector (not including the central government and non-residents). Obligations that are a component of the Money Supply consist of currency held by the public (excluding commercial banks and rural banks), demand deposits, quasi money owned by the domestic private sector, and securities other than shares issued by the monetary system owned by the local private sector with the remaining time is up to one year. The money supply depends on the monetary base, the depositreserve ratio, and the currency-deposit ratio. The monetary base model, the reserve-deposit ratio, and the currency-deposit ratio are the money supply models below the bank's fractional reserves. (Mankiew, 2003) The amount of money in circulation nationally in a decade from 2010 to 2019 can be seen in the following table: Based on the table above, it can be seen that the amount of money that has been increasing has increased from year to year, where a very high increase occurred from 2015 to 2016 with a rise of 10 percent with a difference of Rp 456,177 (billion). The impact of the money supply on national economic growth is only 76.8 percent as stated in the output of the analysis below: According to Dornbusch, in the short run, the increase in money supply growth will have an impact on rising inflation and output levels, but the increase is lower than the growth of the money supply. While money growth rates are usually constant in the long run, expectations have been adjusted to actual inflation and output so that it can be said that without additional money supply, the increase will not occur.

Inflation
A country's economy can be said to be healthy if its economic growth is stable and shows a positive direction. This is reflected in macroeconomic activity. One of the macroeconomic indicators to see the stability of a country's economy is inflation. From an economic perspective, the increase is a monetary phenomenon in a country where the rise and fall of inflation tend to cause economic turmoil because inflation affects economic growth.
Macro variables strongly influence price stability in an economy in the marketplace, therefore, this inflation rate is usually used as an indicator of economic stability. Inflation can cause a decline in real household income, especially for fixed income workers. The increase can also reduce real economic growth, encourage unemployment, and in the long run, can lead to social instability. Nevertheless, the rate of inflation should not be kept as low as possible because it is necessary to increase prices in the economic mechanism in society. With the increase in prices of goods and services will encourage people to carry out production activities so that the economy can be supported to increase national production activities. The inflation rate that occurred in Indonesia in the last decade of 2010-2019, as shown in the following table: Based on the table above, it can be seen that the inflation rate has fluctuated from year to year, where a very high increase occurred from 2012 to 2013, with a rise of 62.8 percent. The impact of the inflation rate on economic growth nationally is only 4.3 percent, as indicated in the output of the analysis below: Inflation is an economic phenomenon which is feared by many countries including Indonesia itself because if the rate of inflation cannot be suppressed, it will have an impact on other economic indicators, for example, it will result in high unemployment so that it will also indirectly have an effect on economic growth caused by low national production.

Investation
According to Todaro (2000: 137-138), investment plays a vital role in driving the nation's economic life, because capital formation increases production capacity, increases national income and creates new jobs, in this case, will further expand employment opportunities. Furthermore, Mankiw (2003: 61) states that technological innovation is one of the factors that can increase investment demand.
Investment can also be interpreted as spending or spending by investors or companies to buy capital goods and equipment to increase the ability to produce products and services available in the economy. In the case of investment or investment, investment or investment is divided into domestic investment (PMDN) and foreign investment (PMA). The graphs of the development of the value of local investment (PMDN) and foreign investment (PMA) can be seen in the table below:: Based on the table above, it can be seen that the level has fluctuated from year to year, where a very high increase occurred from 2017 to 2018 with a rise of 25 percent with an increase in investment of Rp 66,254 (billion). The impact of the total expenditure on national economic growth is only 60.8 percent, as stated in the analysis output below: Indonesia is a country that has excellent prospects for investment or investment, both investment or domestic investment (PMDN), as well as an investment or foreign investment (PMA). If the flow of finance to a country takes place continuously and in the long run and is accompanied by a highly competitive economy, then investment will increase supply by increasing the stock of existing capital. Furthermore, this increase in capital stock will enhance the community's ability to produce output or carry out production activities that increase economic activity in a particular country in Indonesia.

Economic growth
One ofi ---ithe maini ---igoals of a country's developmenti---ois high economici ---igrowth. Why is that because an indicatori ---iofi----ithe success of a icountry's development is high economic growth. (Todaro, 2005) Economici ---igrowth is a processi ---iof increasingi ---ioutput per capita in thei ---ilong run. Three aspects need attention: process, peri --icapita output, and longi ---iterm. Economici ---igrowth is ai ---iprocess, not a financiali ---ipicture iat a time. Here can be seen the dynamic aspects of an economy, which is to know how thei ---ieconomy developsi ---iori---i changes fromi ---otime toi --otime. Economici ---igrowth is associatedi ----iwith ani ---oincrease in output peri --icapita. There are two sides to things that are the total output side and the total population. Output per capita is the total output divided by the community. So the process of increasing production per capita will inevitably be analyzed by looking at what happens with total production on the one hand and the population on the other. The condition of Indonesia's economic growth from 2010-2109 the authors describe in the following table and graph: The table above provides information and a picture of the condition of Indonesia's economic growth nationally in the last ten years 2010-2019 experiencing a declining trend wherein 2010 the national economic growth was 6.22 percent, but in 2019 it fell to 5.02 percent. To see the economic growth in the decade of 2010-2019, whether stationery or not, stationery data tests were carried out as seen in the following output:

Figure 1 OutPut Test Stationery
Source: Correlogram eviews output Based on the above results, it is explained that: 1. The autocorrelation graph in the first lag is outside the Bartlett line and decreases exponentially or slowly, getting smaller, and if it continues, the figure will come out again from the Bartlett line, even though the bar graph moves to the left. Bartlett lines are lines marked by dashed lines on both sides of the midline, both on the autocorrelation and partial autocorrelation charts. 2. The autocorrelation coefficient value is significant at 0.721 (from likely -1 to +1) and decreases to lag 9. 3. The Q statistic's significance against the 9th lag is 23,796, which is far higher than the Kai Squared statistic value. The probability value from lag 1 to lag 9 is very close to zero, meaning less than = 5%. In other words, the data is not stationary. This is reinforced if we look at the foreign debt line graph on graph 4, where the results are not flat; inevitably, the data is not stationary. The condition of Indonesia's economic growth in 2018 is the best growth in the last 4 years, amounting to 5.17 percent. Even though the government initially targeted Indonesia's economic growth in 2018 of 5.4 percent, which was later revised to 5.2 percent. The condition of Indonesia's economic growth, which tends to stagnate, makes the government have to think about plans so that Indonesia is not trapped in a middle-income trap. If you only rely on fiscal and monetary policies, Indonesia's growth is estimated not to be more than 5 percent. To get out of the middle-income trap (middle income trap), economic growth is needed around 7 percent
Changes in the BI Rate will affect the macroeconomy through changes in asset prices. An increase in interest rates will reduce the costs of assets such as stocks and bonds, thereby lowering individuals' and companies' wealth, which in turn reduces their ability to carry out economic activities such as consumption and investment. The impact of changes in interest rates on economic activity also affects public expectations of inflation (expectations). A decrease in interest rates is expected to encourage economic activity, and ultimately inflation helps workers to anticipate rising inflation by asking for higher wages. Producers will eventually charge this wage to consumers through price increases.
Thei ----oincrease in interesti ---irates carried out by the Centrali ----iBank will be responded by market participants and investors to take advantage of the moment to increase production and invest. Along with that, it will also impact the number of production increases, and the labor force will also increase. As a result, exports have increased, and unemployment has declined so that foreign exchange that enters the country strengthens the dollar against other currencies. Vice versa, if interest rates only fall, industrial production will decrease because producers will limit losses. If the number of production decreases, it will weaken the currency.
One crucial indicator in analyzing----ithe Indonesian economy is the rupiah's exchangei -irate against the US dollar. Thei ---iexchangei---irate is essential because it has a broad impact on the economy as a whole. Therefore, the exchange rate movement becomes a serious concern by the monetary authority to monitor and control it, especially concerning factors affecting the exchange rate of the rupiah. Since Indonesia has used a free-floatingi ---iexchange rate policy system implemented by thei ---imonetary---iauthority to control exchange rate fluctuations, it has become even more critical.
Money is determined as a means of payment in international trade, the existence of differences in the value of currencies between countries that carry out foreign trade activities results in exchange rates or differences in exchange rates. The increase or decrease in thei ----iexchangei----irate----iof----ithe Rupiah against the US Dollar has been going on since 2016 until the beginning of 2018, this is not a new phenomenon, but its impact will be significantly felt on national export and import activities. Thei ---ieffecti----iof---ithe exchange---irate movement on the economy, which can occur the exchange rate, positively impacts export demand so that the trade balance increases.
The impact of inflation on the economy as a whole, for example, the prospect of long-term economic development, will worsen, increase disrupts financial stability by damaging the long-term plans of economic actors. If inflation cannot be handled, it will be difficult to control; inflation tends to accelerate and harm individuals and society, creditors/debtors, and producers. The impact of inflation on individuals and culture include: 1) Decreasing levels of community welfare. Inflation causes people's purchasing power to decrease or even lower, especially for people who have a steady income, wage increases are not as fast as rising prices, then this inflation will reduce the real wages of every individual who has a fixed income. 2) Worsening income distribution for people whose income will still face a decline in the actual value of their income and the owners of wealth in the form of money will also decrease. Thus inflation will cause the division of income between fixed income groups and owners of fixed assets will become increasingly uneven.
Thei ---idynamics of investmenti ---ior investmenti ----iaffect economic growth, reflecting the high or sluggish economic development. Investment activities will produce investments that will continue to increase the capital stock (capital stock). Furthermore, an increase in capital stock will increase productivity, capacity, and quality of production, which will drive the rate of economic growth.
One of the efforts made by Indonesia to encourage economic growth is to grow the investment sector. Investment is one of the most critical factors in determining economic growth---iand---iplays a significant role in a country's economic activities. Investment or investment is the purchase of capital goods and equipment and production equipment to increase the ability to produce the products and services needed. Economists say that investment and exports are the engines of economic "engine of growth" in Indonesia.

Conclusion
The interest rate (BI Rate) has an impact rate on national economic growth in the decade 2010-2019 of only 7 percent. Impact of US $ exchange rate on the domestic economic growth of only 90 percent 3) Impact of the amount of money in circulation on the national economic growth of only 76.8 percent, 4) Impact of inflation rate on the domestic economic growth of only 4.3 percent 5) impact of total investment in local economic growth is only 60.8 percent. Thus the main objective of monetary policy is more emphasis on price stability based on several considerations. First, with output determined by long-term economic capacity, any strategy that drives economic growth will create inflation (the short-run Phillips-curve) so that it will not affect real economic growth. Second, the rational commercial agent understands that the surprise actions of policymakers in encouraging the economic growth that support inflation can lead to time consistency problems. Third, monetary policy influencing economic variables takes a long time and has a lag. Fourth, price stability can promote the creation of a better economic climate because it will reduce costs from inflation.