Snowball Effect of Interest Rate as a Control Instrument On Inflation Framework Targetingin Indonesia
Journal Title: Journal of Economics, Business, & Accountancy Ventura - Year 2016, Vol 19, Issue 3
Abstract
Afterthe monetary crisisthe government changes its monetary policy strategyby using a new paradigm that Inflation Targeting framework. This new paradigm has been confirmed in Law No.23 of 1999and UUNo3 of 2004as the basis forthe application of Inflation Targeting Framework inIndonesia The purpose ofthis studywas to determine whether interest rates only impact on inflation or even cause greater impact on other monetary variables. It is very important to knowthe impact,by knowing the impact it can avoid unwanted conditions Data of research is collected since 1970 to 2013, hypothesis testing is used econometric models. The main advantages of econometric models for being able to handle the mutual dependence (interdependence). Beside that econometric model is an invaluable tool for understanding the workings of the economic system and so to test and evaluate policy alternatives andhypothesis testing using multiple regression. The result of this study showed that this study indicate the interest rate turns out not only as an instrument of control of Inflation Targeting Framework but cause a snowball effecton other monetary variables that further strengthen themechanismonInflationTargetingFramework
Authors and Affiliations
Sriyono Sriyono
Antecedents and consequences of transfer of training in public sector organizations
Previous studies only focused on antecedent factors of transfer of training and only a few of them focused on the consequence factors. The main objectives of this research were to examine the antecedents and consequence...
Do investors become risk takers after receiving MLA and accounting information?
This study aimed to find out, empirically, the effect of myopic loss aversion and accounting information on the behavior of investors. The method used is pure experiment by using a 2×2 factorial design between subjects....
The analysis of labor force participation in rubber smallholding sector in Banyuasin Regency, South Sumatera, Indonesia
The fact is that natural rubber has a strategic role as it is one of the commodities industry tropical crops. In addition, it also has important and strategic role in sup-porting the national economy, primarily as a sour...
Determinant factors of investors behavior in investment decision in Indonesian capital markets
This study examines the effect of financial information, macro environment, and subjective norms on investors behavior when making investment decisions in Indonesian capital market. It was conducted by a survey design an...
The role of board of commissioners and transparency in improving bank operational efficiency and profitability
Good corporate governance is a critical aspect in banking industries because the largest part of the source of funds is from public. Two of the important aspects of good corporate governance are the role of the board of...