Thesis
Published
THE PERSISTENCE OF HIGH INFLATION IN INDONESIA AND HOW TO CONTROL INFLATION BASED ON ISLAMIC SCHOLAR PERSPECTIVE
Abstract
The main objective to analyze the persistence of inflation by measuring the rate
of inflation Administered Price and Volatile Food in CPI. Analysis of the determinants
of inflation was also conducted by using variable M2 and SBI 2014 to 2018. Using the
Estimation of Univariate Autoregressive (AR) model and ordinary least squares (OLS).
The result indicates that the level of inflation persistence in Indonesia relatively high. With
the coefficient 0,988 it means high inflation persistence a slow return of inflation to its
long-run value after shock. The highest degree of 7 commodities is the group of commodity
of Housing, Water, Electricity and Fuel that is equal to 0,987. The high degree of inflation
persistence reflected by the length of the time period required to absorb of 50% shocks
before returning to its natural value is 85.36 months approximately 7 years. OLS showed
that M2 has a positive influence and NSBI has a negative influence on inflation. Based on
islamic scholar thought the caused of high persistent in indonesia by lower currency of fiat
money and interest rate for controlling inflation. Islamic monetary policy used gold and
silver as a backup, Islamic finance avoids trading present for future money (prohibition
of usury). A stable of increasing the currency is by trade and production not by increasing
money in circulating.
Keywords: Inflation, Administered Price, Volatile Food, M2, NSBI
Publication Details
InstitutionUniversitas Darussalam Gontor
DepartmentEKONOMI DAN MANAJEMEN
Item ID2191
Deposited26 Mar 2023 02:31