Macroeconomic Stability, Corruption, and Economic Growth in Indonesia: A Long-Run Time-Series Investigation
Keywords:
Economic Growth, Corruption, Inflation, Poverty, OLS
Abstract
This study employs a quantitative research approach using annual time series secondary data from 1995 to 2025. The data were analyzed using the Ordinary Least Squares (OLS) regression method to evaluate both the partial and simultaneous effects of the independent variables on economic growth. The empirical findings reveal that corruption has a negative and statistically significant effect on economic growth, indicating that an increase in corruption tends to reduce Indonesia's economic growth. Inflation also exerts a negative and significant influence on economic growth, suggesting that rising inflation weakens economic performance through declining purchasing power and investment activities. Meanwhile, poverty has a negative but statistically insignificant effect on economic growth, implying that its direct impact was not statistically confirmed during the study period. The study concludes that strengthening anti-corruption measures, maintaining price stability, and improving poverty reduction policies are essential to promoting sustainable economic growth in Indonesia.
References
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Pasaribu, H.P. and E. (2021) 'The Effect of Inflation, PPI, UMP and GDP on Poverty on the Island of Sumatra', MEA Scientific Journal (Management, Economics, and Accounting), 5(3).
Pradikta, M.B.., Pasaribu, E. and Ekaputri, R.A. (2024) ‘Comparison of Inflation and Economic Growth as Monetary Policy Targets in Indonesia for The Period 2002-2021’, Sriwijaya International Journal of Dynamic Economics and Business, 7(3), pp. 257–274. Available at: https://doi.org/10.29259/sijdeb.v7i3.257-274.
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Tenzin, U. (2019) ‘The Nexus Among Economic Growth, Inflation and Unemployment in Bhutan’, South Asia Economic Journal, 20(1). Available at: https://doi.org/10.1177/1391561418822204.
Wijayanti, F.G. & E.P. (2024) 'Does Financial Digitalization, Debit, Credit, Interest Rate, and Exchange Rate Affect Money Supply in Indonesia', HUMAN FALAH: Journal of Economics
Armelly, A., Rusdi, M. and Pasaribu, E. (2021) 'Analysis of the leading sectors of the Indonesian economy: Input-output model', SOROT, 16(2). Available at: https://doi.org/10.31258/sorot.16.2.119-134.
Asri Nur Fadhillah, Nurlina, Salman, R. and Fuadi, Z. (2023) ‘The Effect of Domestic Investment (PMDN) and Foreign Investment (PMA) on Economic Growth in Indonesia Foreign Investment (FDI) on Economic Growth in Indonesia’, Jurnal Sosiohumaniora Kodepena: Information Center for Indonesian Social Sciences, 4(2).
Beju, D.G., Ciupac-Ulici, M.L. and Bresfelean, V.P. (2024) ‘Political stability and corruption nexus: an international perspective on European and Asian countries’, Journal of Risk Finance, 25(3). Available at: https://doi.org/10.1108/JRF-10-2023-0261.
Contreras, S., Ghosh, A. and Hasan, I. (2023) ‘The effect of bank failures on small business loans and income inequality’, Journal of Banking and Finance, 146. Available at: https://doi.org/10.1016/j.jbankfin.2022.106690.
Demmou, L. and Kergozou, N. (2025) ‘OECD Economic Surveys: South Africa 2025’, OECD, 2025.
Fatihah, V. and Pasaribu, E. (2024) 'Analysis of Factors Affecting The Demand For Money in Indonesia', JIMEA | MEA Scientific Journal (Management, Economics, and Accounting), 8(1), pp. 1977–1991.
Febriani, R.E. et al. (2023) ‘Do Corruption, Financial Deepening, And Inflation Drive Economic Growth In Sumatra?’, Jurnal REP (Riset Ekonomi Pembangunan), 8(2). Available at: https://doi.org/10.31002/rep.v8i2.1096.
Malanski, L.K. and Póvoa, A.C.S. (2021) ‘Economic growth and corruption in emerging markets: Does economic freedom matter?’, International Economics, 166. Available at: https://doi.org/10.1016/j.inteco.2021.02.001.
Mamo, F.T. (2012) ‘Economic Growth and Inflation A panel data analysis’, Economics [Preprint].
Omoniyi, B.B. (2018) ‘An examination of the causes of poverty on economic growth in Nigeria’, Africa’s Public Service Delivery and Performance Review, 6(1). Available at: https://doi.org/10.4102/apsdpr.v6i1.175.
Oshora, B. et al. (2021) ‘Economic Growth, Investment, Population Growth and Unemployment in Ethiopia’, SHS Web of Conferences, 90. Available at: https://doi.org/10.1051/shsconf/20219001013.
Osuma, G. and Nzimande, N. (2025) ‘Examining the Misery Index and Its Effects on Economic Inequality and Social Welfare in Sub-Saharan Africa: The Moderating Role of Corruption’, Sustainability (Switzerland), 17(6). Available at: https://doi.org/10.3390/su17062522.
Pasaribu, E. (2022) 'A Study of Economic Growth and Inflation on Indonesia's Unemployment Rate', 4(2), pp. 1–13. Available at: https://ejournal.unib.ac.id/convergence-jep/article/view/28517/12694.
Pasaribu, E., Ekaputri, R.A. and Yefriza, Y. (2023) ‘Effectiveness of Monetary Policy in Indonesia’, Integrated Journal of Business and Economics, 7(2). Available at: https://doi.org/10.33019/ijbe.v7i2.645.
Pasaribu, H.P. and E. (2021) 'The Effect of Inflation, PPI, UMP and GDP on Poverty on the Island of Sumatra', MEA Scientific Journal (Management, Economics, and Accounting), 5(3).
Pradikta, M.B.., Pasaribu, E. and Ekaputri, R.A. (2024) ‘Comparison of Inflation and Economic Growth as Monetary Policy Targets in Indonesia for The Period 2002-2021’, Sriwijaya International Journal of Dynamic Economics and Business, 7(3), pp. 257–274. Available at: https://doi.org/10.29259/sijdeb.v7i3.257-274.
Song, C.Q., Chang, C.P. and Gong, Q. (2021) ‘Economic growth, corruption, and financial development: Global evidence’, Economic Modelling, 94. Available at: https://doi.org/10.1016/j.econmod.2020.02.022.
Tenzin, U. (2019) ‘The Nexus Among Economic Growth, Inflation and Unemployment in Bhutan’, South Asia Economic Journal, 20(1). Available at: https://doi.org/10.1177/1391561418822204.
Wijayanti, F.G. & E.P. (2024) 'Does Financial Digitalization, Debit, Credit, Interest Rate, and Exchange Rate Affect Money Supply in Indonesia', HUMAN FALAH: Journal of Economics
Published
2026-06-22
How to Cite
Esti Pasaribu. (2026). Macroeconomic Stability, Corruption, and Economic Growth in Indonesia: A Long-Run Time-Series Investigation . International Journal of Economics, Business and Innovation Research, 5(04), 3718-3727. https://doi.org/10.63922/ijebir.v5i04.4991
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