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The Interaction of Global and Domestic Economic Variables on Inflation in Indonesia
Abstract
This study investigates the dynamic interplay between global oil prices, the rupiah exchange rate, interest rates, and inflation in Indonesia using the Autoregressive Distributed Lag (ARDL) method on time series data from 1986 to 2023. The analysis identifies a long-term cointegrating relationship among these variables. However, oil prices and interest rates were found to have statistically insignificant long-term effects on inflation, likely due to government interventions such as fuel subsidies and active monetary policies. In the short term, exchange rate depreciation significantly influences inflation, while interest rate hikes exhibit a deflationary effect. The error correction model suggests that approximately 17% of inflationary disequilibria are corrected each year. These findings emphasize the need for adaptive policy strategies that account for Indonesia’s external vulnerabilities while reinforcing domestic resilience through diversification and inflation targeting mechanisms.
Studi ini menginvestigasi interaksi dinamis antara harga minyak global, nilai tukar rupiah, suku bunga, dan inflasi di Indonesia dengan menggunakan metode Autoregressive Distributed Lag (ARDL) pada data runtun waktu dari tahun 1986 hingga 2023. Analisis ini mengidentifikasi adanya hubungan kointegrasi jangka panjang di antara variabel-variabel tersebut. Namun, harga minyak dan suku bunga ditemukan memiliki pengaruh jangka panjang yang tidak signifikan secara statistik terhadap inflasi, kemungkinan besar disebabkan oleh intervensi pemerintah seperti subsidi bahan bakar dan kebijakan moneter yang aktif. Dalam jangka pendek, depresiasi nilai tukar secara signifikan mempengaruhi inflasi, sementara kenaikan suku bunga menunjukkan efek deflasi. Model koreksi kesalahan menunjukkan bahwa sekitar 17% dari disekuilibrasi inflasi dikoreksi setiap tahunnya. Temuan ini menekankan perlunya strategi kebijakan adaptif yang memperhitungkan kerentanan eksternal Indonesia sekaligus memperkuat ketahanan domestik melalui diversifikasi dan mekanisme penargetan inflasi.
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DOI: https://doi.org/10.37058/wlfr.v6i1.15164
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