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

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  • Nizar, Muhammad Afdi

Abstract

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.

Suggested Citation

  • Nizar, Muhammad Afdi, 2012. "Dampak Fluktuasi Harga Minyak Dunia Terhadap Perekonomian Indonesia
    [The Impact of World Oil Prices Fluctuation on Indonesia’s Economy]
    ," MPRA Paper 65601, University Library of Munich, Germany.
  • Handle: RePEc:pra:mprapa:65601
    as

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    File URL: https://mpra.ub.uni-muenchen.de/65601/1/MPRA_paper_65601.pdf
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    References listed on IDEAS

    as
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    More about this item

    Keywords

    Demand Effect; Oil Price Shocks; Supply Effect; Terms of Trade;

    JEL classification:

    • F41 - International Economics - - Macroeconomic Aspects of International Trade and Finance - - - Open Economy Macroeconomics
    • F47 - International Economics - - Macroeconomic Aspects of International Trade and Finance - - - Forecasting and Simulation: Models and Applications

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