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A Model of the Dynamics of the Effect of World Crude Oil Price and World Rice Price on Indonesia’s Inflation Rate

Author

Listed:
  • Adam, P.
  • Rianse, U.
  • Harafah, Ĺ. M.
  • Cahyono, E.
  • Rafiy, M.

Abstract

This study aims to investigate the dynamics of the effects of world crude oil prices and world rice prices on Indonesia’s inflation rate in the period between January 2004 and September 2015. Monthly time series data spanning from January 2004 to September 2015 are analyzed using difference equation model as the econometric tool. Test result shows that there existed a dynamic effect of world oil crude prices and world rice prices on inflation rate in Indonesia. The World crude oil prices positively affected the inflation rate in that each 1% increase (decrease) in the world crude oil prices caused the inflation rate to go up (drop) by 0.33%. The world rice prices also positively affected the inflation rate, where each 1% increase (decrease) in world rice prices was followed by a 0.52% rise (fall) of the inflation rate.

Suggested Citation

  • Adam, P. & Rianse, U. & Harafah, Ĺ. M. & Cahyono, E. & Rafiy, M., 2016. "A Model of the Dynamics of the Effect of World Crude Oil Price and World Rice Price on Indonesia’s Inflation Rate," AGRIS on-line Papers in Economics and Informatics, Czech University of Life Sciences Prague, Faculty of Economics and Management, vol. 8(1), pages 1-10, March.
  • Handle: RePEc:ags:aolpei:233915
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    File URL: http://ageconsearch.umn.edu/record/233915/files/agris_on-line_2016_1_adam_rianse_harafah_cahyono_rafiy.pdf
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    References listed on IDEAS

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    Cited by:

    1. repec:eco:journ2:2018-03-6 is not listed on IDEAS
    2. repec:ibn:ijefaa:v:9:y:2017:i:6:p:167-173 is not listed on IDEAS
    3. Pasrun Adam & Pasrun Adam & Rosnawintang Rosnawintang & Ambo Wonua Nusantara & Abd Aziz Muthalib, 2017. "A Model of the Dynamic of the Relationship between Exchange Rate and Indonesia’s Export," International Journal of Economics and Financial Issues, Econjournals, vol. 7(1), pages 255-261.
    4. repec:eco:journ2:2018-01-11 is not listed on IDEAS

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