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The determinant of core inflation in Indonesia
This paper analyzes factors affecting core inflation in Indonesia. Using quarterly data, we argue that after economic crisis in 1997/1998, core inflation is significantly affected by backward-looking expectation (its lag), forward-looking expectation (consensus forecast), output gap, exchange rate (growth and volatility), and the growth of M1. Comparing to the whole sample (1992-2011), the role of lag of core inflation becomes more significant, exchange rate pass-through is smaller, and the impact of volatility of exchange rate is bigger after the crisis. Employing MV filter method, we find an output gap threshold. Econometric model shows that the role of BI rate to reduce core inflation is limited. Using ARDL model and monthly data (year-on-year) from January 2002 to June 2011, we find that administered price inflation and volatile food inflation, to some extent, have an effect on the dynamic of core inflation. In general, the effect of volatile foods group on core inflation is bigger than the effect of administered prices group. Some commodities in administered prices basket have significant impact on core inflation, such as fuel, intercity transportation, household fuel, and telephone charge. Some commodities in volatile foods basket also have significant impact on core inflation, such as rice, beef, milk, noodles, and cooking oil..
Ketersediaan
| Call Number | Location | Available |
|---|---|---|
| PSB lt.2 - Karya Akhir | 1 |
| Penerbit | Jurnal BPPK., 2014 |
|---|---|
| Edisi | - |
| Subjek | Indonesia Exchange rate Monetary policy Inflation |
| ISBN/ISSN | - |
| Klasifikasi | - |
| Deskripsi Fisik | - |
| Info Detail Spesifik | - |
| Other Version/Related | Tidak tersedia versi lain |
| Lampiran Berkas | Tidak Ada Data |