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Dampak Fluktuasi Harga Minyak Dunia Terhadap Perekonomian Indonesia
[The Impact of World Oil Prices Fluctuation on Indonesia’s Economy]

Listed author(s):
  • Nizar, Muhammad Afdi

This study aims to determine the impact of oil price shocks in the world markets on the economy of Indonesia during 2000–2011. Based on monthly time series data and using VAR model, the study tries to analyze effects of oil price shocks to economic growth, inflation rates, money supply, real exchange rates and interest rates. The results show several conclusions: (i) the oil price shocks in the world market have a positive impact on quarterly economic growth; (ii) it also pushes up the domestic inflation rate for a year; (iii) it increases the domestic money supply which lasts for 5 months; (iv) it negatively affects the real exchange rate of Rupiah for 10 months and (v) it leads to rising domestic interest rates (the effect of oil shocks on interest rates lasted for 10 months). Therefore, government needs to take steps that could transform the people habits of fuel uses from wasteful to the efficient one. In addition, the alternative energy development also needs to promoted.

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File URL: https://mpra.ub.uni-muenchen.de/65601/1/MPRA_paper_65601.pdf
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Paper provided by University Library of Munich, Germany in its series MPRA Paper with number 65601.

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Date of creation: Dec 2012
Publication status: Published in Buletin Ilmiah Litbang Perdagangan 2.6(2012): pp. 189-210
Handle: RePEc:pra:mprapa:65601
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  1. Hamilton, James D., 1996. "This is what happened to the oil price-macroeconomy relationship," Journal of Monetary Economics, Elsevier, vol. 38(2), pages 215-220, October.
  2. Tang, Weiqi & Wu, Libo & Zhang, ZhongXiang, 2010. "Oil price shocks and their short- and long-term effects on the Chinese economy," Energy Economics, Elsevier, vol. 32(Supplemen), pages 3-14, September.
  3. Lardic, Sandrine & Mignon, Valérie, 2008. "Oil prices and economic activity: An asymmetric cointegration approach," Energy Economics, Elsevier, vol. 30(3), pages 847-855, May.
  4. Cologni, Alessandro & Manera, Matteo, 2008. "Oil prices, inflation and interest rates in a structural cointegrated VAR model for the G-7 countries," Energy Economics, Elsevier, vol. 30(3), pages 856-888, May.
  5. Lutz Kilian, 2008. "The Economic Effects of Energy Price Shocks," Journal of Economic Literature, American Economic Association, vol. 46(4), pages 871-909, December.
  6. Dogrul, H. Günsel & Soytas, Ugur, 2010. "Relationship between oil prices, interest rate, and unemployment: Evidence from an emerging market," Energy Economics, Elsevier, vol. 32(6), pages 1523-1528, November.
  7. Hamilton, James D, 1988. "A Neoclassical Model of Unemployment and the Business Cycle," Journal of Political Economy, University of Chicago Press, vol. 96(3), pages 593-617, June.
  8. Nizar, Muhammad Afdi, 2002. "Kenaikan Harga Minyak Dunia Dan Implikasinya Bagi Indonesia
    [Increasing The World'S Oil Price And Implications For Indonesia]
    ," MPRA Paper 65770, University Library of Munich, Germany.
  9. Sadorsky, Perry, 1999. "Oil price shocks and stock market activity," Energy Economics, Elsevier, vol. 21(5), pages 449-469, October.
  10. Kesicki, Fabian, 2010. "The third oil price surge - What's different this time?," Energy Policy, Elsevier, vol. 38(3), pages 1596-1606, March.
  11. Brown, Stephen P. A. & Yucel, Mine K., 2002. "Energy prices and aggregate economic activity: an interpretative survey," The Quarterly Review of Economics and Finance, Elsevier, vol. 42(2), pages 193-208.
  12. Lardic, Sandrine & Mignon, Valerie, 2006. "The impact of oil prices on GDP in European countries: An empirical investigation based on asymmetric cointegration," Energy Policy, Elsevier, vol. 34(18), pages 3910-3915, December.
  13. Henriques, Irene & Sadorsky, Perry, 2011. "The effect of oil price volatility on strategic investment," Energy Economics, Elsevier, vol. 33(1), pages 79-87, January.
  14. Hamilton, James D, 1983. "Oil and the Macroeconomy since World War II," Journal of Political Economy, University of Chicago Press, vol. 91(2), pages 228-248, April.
  15. Andreas Breitenfellner & Jesús Crespo Cuaresma & Catherine Keppel, 2009. "Determinants of Crude Oil Prices: Supply, Demand, Cartel or Speculation?," Monetary Policy & the Economy, Oesterreichische Nationalbank (Austrian Central Bank), issue 4, pages 111-136.
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