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Determinant Of Food Inflation : The Case Of Indonesia

Author

Listed:
  • Bambang I. Ismaya

    (Bank Indonesia)

  • Donni F. Anugrah

    (Bank Indonesia)

Abstract

In this paper, we investigate the determinants of food inflation in Indonesia. Using quarterly data (2008:Q1 to 2017:Q4) and a GMM estimator, we show that backward-looking and forward-looking expectations have a strong impact on food inflation. Additionally, we show that the determinants of general food price inflation, such as food production, agriculture sector output, infrastructure, food import, agriculture sector credit, demand level (M1/consumption), and seasonal event (Eid Mubarak), are highly significant. Backward-looking and forward-looking expectations, domestic oil price, and level of demand have contributed to high food price while factors relating to general food price inflation have reduced food price.

Suggested Citation

  • Bambang I. Ismaya & Donni F. Anugrah, 2018. "Determinant Of Food Inflation : The Case Of Indonesia," Bulletin of Monetary Economics and Banking, Bank Indonesia, vol. 21(1), pages 1-14, July.
    • Handle: RePEc:idn:journl:v:21:y:2018:i:1:p:1-14
    DOI: https://doi.org/10.21098/bemp.v21i1.926
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    Cited by:

    1. Zhian Zhiow Augustinne Wong & Ramez Abubakr Badeeb & Abey P. Philip, 2023. "Financial Inclusion, Poverty, and Income Inequality in ASEAN Countries: Does Financial Innovation Matter?," Social Indicators Research: An International and Interdisciplinary Journal for Quality-of-Life Measurement, Springer, vol. 169(1), pages 471-503, September.
    2. Tule, Moses K. & Salisu, Afees A. & Ebuh, Godday U., 2020. "A test for inflation persistence in Nigeria using fractional integration & fractional cointegration techniques," Economic Modelling, Elsevier, vol. 87(C), pages 225-237.

    More about this item

    Keywords

    Inflation’s determinants; Expectations; Indonesia; GMM;
    All these keywords.

    JEL classification:

    • C22 - Mathematical and Quantitative Methods - - Single Equation Models; Single Variables - - - Time-Series Models; Dynamic Quantile Regressions; Dynamic Treatment Effect Models; Diffusion Processes
    • E31 - Macroeconomics and Monetary Economics - - Prices, Business Fluctuations, and Cycles - - - Price Level; Inflation; Deflation
    • E51 - Macroeconomics and Monetary Economics - - Monetary Policy, Central Banking, and the Supply of Money and Credit - - - Money Supply; Credit; Money Multipliers

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