CHAPTER 1 Explaining Higher Inflation in Indonesia: A Regional Comparison
Author:
Mr. Geremia Palomba https://isni.org/isni/0000000404811396 International Monetary Fund

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Language:
English
Print Publication Date:
19 Jan 2012
Keywords:
BOOK; Indonesia; firm; capital structure; inflation in Indonesia; inflation risk premium; inflation expectation; Indonesian firm; Inflation; Corporate sector; Corporate governance; Reserve positions; Global; Asia and Pacific; slope dummy; inflation differential; IMF staff calculation; exchange rate; currency depreciation; Output gap; Monetary expansion; Nominal effective exchange rate; Exchange rates

Abstract

Over the 20 years beginning in 1990, inflation in Indonesia has been consistently higher than elsewhere in the Asia region. 1 Indeed, inflation has often exceeded the 7–11 percent threshold above which it is estimated to adversely affect growth (Khan and Senhadji, 2000). At these rates, inflation may also make the poor significantly worse off by reducing real minimum wages and the income share of the lowest quintile (Easterly and Fischer, 2001). The higher inflation rate and its potential adverse effects raise the question: what is driving the Indonesian inflation differential vis-à-vis its neighbors?

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Cover Indonesia
Indonesia
Sustaining Growth During Global Volatility
ISBN:
9781616352028
Publication Date:
19 Jan 2012
Publisher:
International Monetary Fund
DOI:
https://doi.org/10.5089/9781616352028.071
Pages:
141