This study aims to examine the relationship between inflation and interest rates in Indonesia from 2015 to 2024 and the extent to which inflation affects interest rates in Indonesia from 2015 to 2024. This study uses a quantitative approach. Data collection used secondary data, with inflation data obtained from the Central Bureau of Statistics and interest rates data from Bank Indonesia for the period 2015 to 2024. The data analysis methods used in this study were correlation analysis and simple linear regression. The research results show a positive relationship between inflation and interest rates in Indonesia from 2015 to 2024. Meanwhile, inflation significantly impacted interest rates in Indonesia from 2015 to 2024. Keywords: Inflation, Interest Rates, Indonesia

The response of nominal and real interest rates to expected deflation becomes problematic when nominal interest rates fall toward zero while the expected rate of deflation is increasing. As nominal interest rates approach their lower bound, further increases in expected deflation cannot cause the nominal rate to fall. Either the Fisher equation is violated or the real rate must increase. One way for the real rate to rise is for asset prices to fall. Regressions between 2003 and 2010 of the daily percentage change in the S&P 500 on the TIPS spread measuring inflation expectations show little correlation between asset prices and expected inflation from 2003 until early 2008. However, since early 2008 the correlation between changes in stock prices and in inflation expectations has been strongly positive and statistically significant.

The main objective of this paper is to investigate the relationship between the nominal interest rates and inflation rate, and to verify the presence of the Fisher effect in Iraq during the period 2005M01 to 2016M12. Using the Johansen cointegration analysis and error correction model (VECM). The empirical results of this paper indicate that there is a long-run equilibrium relationship between nominal interest rates and expected inflation and existence of the partial Fisher effect in the long run . But, Fisher effect did not exist in the short run. Thus, there is the effectiveness of monetary policy in the short run, and the weakness of its effectiveness in the long run .

This article reexamines tests on the behavior of real interest rates in light of recent results that indicate that regressors are nonstationary and not strictly exogenous. Strong rejections of constancy of real interest rates that have been found previously in the literature are confirmed here. Although there is some evidence here that real rates are negatively correlated with expected inflation, this result is not as strong as has been indicated by previous research. In addition, results that found a significant negative correlation between real rates and nominal rates before 1979 are not supported here, although there is evidence for a positive correlation of real and nominal interest rates after 1979.

nominal interest rates, giving a smaller effect if any on real interest rates. In addition, higher expected inflation tends to be built into the rate In economics, inflation is an increase in the average price of goods and services in terms of money, though it originally referred to the increase of the money supply (monetary inflation) that can cause such a universal shift. This increase is measured using a price index, typically a consumer price index (CPI). When the general price level rises, each unit of currency buys fewer goods and service I… John Maynard Keynes in his 1936 main work The General Theory of Employment, Interest and Money emphasized that wages and prices were sticky in the short run, but gradually responded to aggregate demand shocks. These could arise from many different sources, e.g.…