Snowball Effect of Interest Rate as a Control Instrument on Inflation Targeting Framework in Indonesia  

Oleh:

Sriyono

Jenis: Article from Journal - ilmiah nasional - terakreditasi DIKTI
Dalam koleksi: Journal of Economics, Business, & Accountancy: ventura vol. 19 no. 3 (2017), page 305 – 314.
Topik: Interest Rate; and Inflation Targeting Framework.
Fulltext: 885-2489-1-PB_Ros.pdf (512.84KB)

Isi artikel

The purpose of this study was to determine whether interest rate solely affects inflation or even has a greater impact on the monetary variables. It is very important to know the impact, by analyzing the impact on avoiding unwanted conditions. Data of re-search were collected during 1970 to 2013. The hypothesis testing was done using an econometric model. The main advantages of econometric models are for being able to handle the mutual dependence (interdependence). Besides that, an econometric model is an invaluable tool for understanding the workings of the economic system and so to test and evaluate policy alternatives and hypothesis testing using multiple regressions. The result of this study showed that the interest rate turns out not only as an instru-ment of control of Inflation Targeting Framework but cause a snowball other monetary variables further strengthen the mechanism on Inflation Targeting Framework.

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