Analisis Dinamika Inflasi di Indonesia: Pendekatan Sisi Penawaran

Abstract

Stability of inflation becomes a main target of every country, including Indonesia. A shock on demand and supply may lead to fluctuation of inflation. Many economists have stated that cost push inflation is the main problem of inflation in developing country. This shock on supply will affect the price level in provinces of Indonesia. A static panel data with cross section data of 33 provinces and time series data of 2008-2012 is used in this research in order to analyze the relation between cost push inflation and regional inflation in Indonesia. The result of this research shows a positive and significant relation between cost push inflation variable and regional inflation in Indonesia, except the main goods price. The cost push inflation variable which has the bigest influence towards regional inflation compared to another variable is the administered price Variabel. Dynamics of inflation has a strong relation with cost of living. The result of this research also shows that provinces with high cost of living are not always followed by the rise of a high cost of living, for example in Jakarta and Papua Province.