The adoption of inflation target for Indonesia is a desirable option of monetary policy. This decision is induced by new system of exchange rate that is used of Indonesia since August 1997. The economics and institutional pre-condition is required for the successful adoption of inflation targeting. The paper focuses on two issues. First, how is transmission mechanism of monetary policy? Second, is the dominant channel of transmission mechanism will support the inflation targeting adoption? Are the economics and institutional conditions ready for inflation targeting adoption?
The quarterly Indonesia data for the 1981.1 – 2004.2 periods dan the Vector Autoregressions is used as data and method for transmission mechanism model. The empirical results show that real exchange rate is a dominant channel of transmission mechanism. The shocks of real exchange rate will influence output and inflation immediately. The domestic interest rate shocks will affect the output and inflation weaker and slower then real exchange rate shocks. The application of inflation targeting in Indonesia still needs institutional and public commitment to improve the structural economy condition, policy coordination and some other technical issues
tulisan ini dipresentasikan di Surabaya, 2004
benarkan Indonesia telah siap untuk penargetan inflasi? atau jangan-jangan independensi BI justru akan membuat gamang
aku ingat kata-kata Bu Ning, kita ini kemampuan desa (sori tidak mendistorsi peran desa lo), namun mengadopsi semua sistem best practices di dunia. Yang terjadi adalah : GAGAP
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