IDEAS home Printed from https://ideas.repec.org/p/idn/wpaper/wp112023.html
   My bibliography  Save this paper

Policy Mix: Supply-Side Policies To Address The Trend Of Rising Inflation

Author

Listed:
  • Donni F. Anugrah

    (Bank Indonesia)

  • Danny Hermawan

    (Bank Indonesia)

  • Denny Lie

    (University of Sydney)

  • Solikin M. Juhro

    (Bank Indonesia)

  • Misbahol Yaqin

    (Bank Indonesia)

Abstract

In line with the dynamics of inflation in the last 10 years in ASEAN, especially inIndonesia, this research analyzes the factors that influence inflation in Indonesiaand ASEAN. Apart from that, this research also reviews the role of supply-sidepolicies to overcome inflation trends. The panel data used is 34 provinces inIndonesia from 2010Q1 to 2022Q4 using the GMM method. Meanwhile, for theASEAN analysis, data from three countries, namely Indonesia, the Philippines and Vietnam, were included for the same time period and used the ARDL method. Theestimation results for the Indonesian case show that food price inflation is influencedby Gross Regional Domestic Product (GRDP), wages, food imports, global food pricesand National Religious Holidays (HKBN). From a policy perspective, this researchalso finds that apart from (conventional) monetary policy which influences demand (through interest rates), there is a role for food subsidies which influence the supplyside in stabilizing food prices in Indonesia. These findings are also confirmed in theempirical analysis for selected ASEAN countries. This implies that a mix of monetarypolicy and food subsidies can be used to control food prices in Indonesia.

Suggested Citation

  • Donni F. Anugrah & Danny Hermawan & Denny Lie & Solikin M. Juhro & Misbahol Yaqin, 2023. "Policy Mix: Supply-Side Policies To Address The Trend Of Rising Inflation," Working Papers WP/11/2023, Bank Indonesia.
    • Handle: RePEc:idn:wpaper:wp112023
    as

    Download full text from publisher

    File URL: http://publication-bi.org/repec/idn/wpaper/WP112023.pdf
    File Function: First version, 2023
    Download Restriction: no
    ---><---

    More about this item

    Keywords

    Food Inflation; Food Subsidies; GMM;
    All these keywords.

    JEL classification:

    • E31 - Macroeconomics and Monetary Economics - - Prices, Business Fluctuations, and Cycles - - - Price Level; Inflation; Deflation
    • H20 - Public Economics - - Taxation, Subsidies, and Revenue - - - General
    • E51 - Macroeconomics and Monetary Economics - - Monetary Policy, Central Banking, and the Supply of Money and Credit - - - Money Supply; Credit; Money Multipliers

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:idn:wpaper:wp112023. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    We have no bibliographic references for this item. You can help adding them by using this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Lutzardo Tobing or Jimmy Kathon (email available below). General contact details of provider: https://edirc.repec.org/data/bigovid.html .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.