Analysis of the Viability of Fiscal and Monetary Policies on the Recovery of Household Consumption Expenditures Because of the Covid-19 Pandemic

The Covid-19 outbreak disrupted economic activity in almost all countries. Indonesian economy entered a recession phase as result of the continued contraction growth second and third quarters 2020. According to Keynesian theory, combination fiscal policy monetary was more effective recovering from crisis, this study aims measure effect government spending, money supply, inflation interest rates on aggregate household consumption expenditure. This used quantitative method, using monthly time series data January 2015 December were analyzed Vector Error Correction Model (VECM). results show that spending has negative impact expenditure long run meanwhile rate positive Inflation do not affect expenditure, both short term. analysis are useful for evaluating policies taken by overcome crisis due spread outbreak. increases cover decline decrease real income. Then expansionary will increase demand. Therefore, Ministry Finance together with Bank Indonesia needs design other have recovery included macro indicators expenditures such unemployment, taxes marginal propensity saving (MPS).
 
 Keywords: Household Aggregate Expenditure; Government Inflation; VECM