The Effect of Macroeconomic Variables and the Covid-19 Pandemic on National Income in Indonesia

Abstract

Gross domestic product is one of the measuring tools in looking at a country's economy.Macroeconomic variables have an essential role in increasing or decreasing national income. The COVID-19 pandemic has had an impact on the economy. This study aims to analyze macroeconomic variables and the effect of the Covid-19 pandemic on national income. The data used are quarterly data from 2012 to 2021. Data analyzed using the Auto Regressive Distributed Lag (ARDL) method shows a stable long-term relationship between macroeconomic variables and national income. This study shows that interest rates, inflation, and the Covid-19 period have a significant negative effect. The exchange rate and money supply have a significant positive impact on national income in the long-term coefficient. For short-term coefficients, interest rates, inflation, and money supply have a significant effect, while inflation has no significant impact on national income.