A Critical Review on Interest Rate as A Tool of Monetary Policy

Authors

  • Diyah Putriani Lecturer (on leave) at FEB UGM and PhD Student at IIU Malaysia.
  • Prastowo Lecturer at Faculty of Economics, Universitas Islam Indonesia (FE UII).

Abstract

Objectives: This research is aimed to critically review the relationship between interest rate and economic downturn
Methods: Meta-analysis.
Results: The existing monetary policy will always create higher inflation rate overtime triggering economic crisis in the long run. This is not merely about how the monetary authority strictly manages the supply and demand for money in the economy.
Conclusion: This paper concludes that interest rate give negative contribution to the economic growth.
Keywords: Interest rate, economic downturn, monetary policy, meta-analysis

Downloads

Published

2016-04-19

Issue

Vol. 9 No. 2 (2015)

Section

Articles