Inflation dynamics and monetary policy in Indonesia

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Syurkani (2010) Inflation dynamics and monetary policy in Indonesia. PhD thesis, Victoria University.


Since the last two decades, many countries around the world have gone through a significant transformation in monetary policy. Their central banks now set low and stable inflation as their ultimate target in the long run. The main components of the successful implementation of this inflation targeting are transparency and credibility, and their accomplishment will be judged by public in their expectations about future inflation. As a result, the central banks implement a set of modern monetary policy principles to improve their transparency and credibility, and one of those modern principles is the adoption of a monetary policy rule. In this study, we attempt to investigate the conduct of monetary policy under an inflation targeting framework and explore the role of public inflation expectations in the monetary policy rule. We develop an expectations-augmented Taylor rule model for monetary policy using public inflation expectations and core inflation data to replace the traditional output gap and actual inflation, respectively.

Item type Thesis (PhD thesis)
Subjects Historical > FOR Classification > 1402 Applied Economics
Historical > Faculty/School/Research Centre/Department > Centre for Strategic Economic Studies (CSES)
Keywords inflation dynamics, inflation, public inflation, inflation forecasting, inflation targeting, monetary policy, monetary policy rule, economic indicators, Bank Indonesia, Indonesia, Indonesian economy, central bank
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