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Forecasting Inflation in Indonesia

Author

Listed:
  • Ms. Uma Ramakrishnan
  • Mr. Athanasios Vamvakidis

Abstract

A reliable inflation-forecasting model is central for a sound monetary policy framework. In this paper, we study the domestic and international transmission effects on inflation in Indonesia and analyze the possible leading indicators of inflation. We identify the exchange rate, foreign inflation, and monetary growth as the main variables with a significant predictive power for inflation in Indonesia.

Suggested Citation

  • Ms. Uma Ramakrishnan & Mr. Athanasios Vamvakidis, 2002. "Forecasting Inflation in Indonesia," IMF Working Papers 2002/111, International Monetary Fund.
    • Handle: RePEc:imf:imfwpa:2002/111
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    References listed on IDEAS

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    1. Paul R. Masson & Miguel A. Savastano & Sunil Sharma, 2019. "The Scope for Inflation Targeting in Developing Countries," World Scientific Book Chapters, in: Macroeconomic Modelling and Monetary and Exchange Rate Regimes, chapter 10, pages 331-383, World Scientific Publishing Co. Pte. Ltd..
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    5. Reza Yamora Siregar, 1999. "Real exchange rate targeting and inflation in Indonesia: theory and empirical evidence," Applied Financial Economics, Taylor & Francis Journals, vol. 9(4), pages 329-336.
    6. Ahmed, Sadiq & Kapur, Basant K., 1990. "How Indonesia's monetary policy affects key variables," Policy Research Working Paper Series 349, The World Bank.
    7. Mr. Arto Kovanen & Mr. Olivier M Frecaut & Ms. Barbara E Baldwin & Mr. Charles Enoch, 2001. "Indonesia: Anatomy of a Banking Crisis Two Years of Living Dangerously 1997–99," IMF Working Papers 2001/052, International Monetary Fund.
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    Cited by:

    1. Aginta, Harry, 2023. "Revisiting the Phillips curve for Indonesia: What can we learn from regional data?," Journal of Asian Economics, Elsevier, vol. 85(C).
    2. Ina Nurmalia Kurniati, 2015. "Forecasting Growth Of Third Party Funds," Working Papers WP/10/2015, Bank Indonesia.
    3. Khalid M. Kisswani & Arezou Harraf & Amjad M. Kisswani, 2019. "Revisiting the effects of oil prices on exchange rate: asymmetric evidence from the ASEAN-5 countries," Economic Change and Restructuring, Springer, vol. 52(3), pages 279-300, August.
    4. Siregar, Reza & Rajaguru, Gulasekaran, 2005. "Sources of variations between the inflation rates of Korea, Thailand and Indonesia during the post-1997 crisis," Journal of Policy Modeling, Elsevier, vol. 27(7), pages 867-884, October.
    5. Ranjith Bandara, 2011. "The Determinants of Inflation in Sri Lanka," South Asia Economic Journal, Institute of Policy Studies of Sri Lanka, vol. 12(2), pages 271-286, September.
    6. Man Wang & Kun Chen & Qin Luo & Chao Cheng, 2018. "Multi-Step Inflation Prediction with Functional Coefficient Autoregressive Model," Sustainability, MDPI, vol. 10(6), pages 1-16, May.
    7. Solikin M. Juhro & Bernard Njindan Iyke, 2019. "Forecasting Indonesian Inflation Within An Inflation-Targeting Framework: Do Large-Scale Models Pay Off?," Bulletin of Monetary Economics and Banking, Bank Indonesia, vol. 22(4), pages 423-436, December.
    8. Susan Sunila Sharma, 2019. "WHICH VARIABLES PREDICT INDONESIA’s INFLATION?," Bulletin of Monetary Economics and Banking, Bank Indonesia, vol. 22(1), pages 87-102, April.

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