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DECENTRALIZATION AND REGIONAL INFLATION IN INDONESIA

Bulletin of Monetary Economics and Banking

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Field Value
 
Title DECENTRALIZATION AND REGIONAL INFLATION IN INDONESIA
 
Creator Tirtosuharto, Darius
Adiwilaga, Handri
 
Description The link between decentralization and inflation as one of the key aspects of macro economic stability has been surveyed by a number of studies and the findings are generally inconclusive. Using sample data of developing and developed countries, previous study found that decentralization correlates with lower inflation in developed countries and vice versa, it correlates with higher inflation in developing countries. The key question is what factors play a role in controlling inflation in a decentralized system. This paper is to argue that the coordination problem is the main issue in controlling inflation in a decentralized system, particularly in developing countries. The empirical analysis is to determine the effect of decentralization on regional inflation in Indonesia and whether institutions play a role in the recent downward trend of inflation in Indonesia. A panel data that includes 33 observations of the Indonesian regions (provinces) is constructed with a dummy variable representing the existence of institution. In addition, this study analyzes whether decentralization supports the convergence in regional inflation and also the pattern of spatial correlation in regional inflation. The assumption is that there are some degrees of collective institutional coordination and cooperation with the establishment of Regional Inflation Task Force (RITF).
 

Keywords : Decentralization, Regional Inflation Convergence, Regional InstitutionJEL Classification: E31, H73, R12
 
Publisher Bank Indonesia
 
Date 2014-04-04
 
Type info:eu-repo/semantics/article
info:eu-repo/semantics/publishedVersion
Peer-reviewed Article
 
Format application/pdf
 
Identifier https://www.bmeb-bi.org/index.php/BEMP/article/view/30
10.21098/bemp.v16i2.30
 
Source Buletin Ekonomi Moneter dan Perbankan; Vol 16 No 2 (2013): OCTOBER; 149-166
Buletin Ekonomi Moneter dan Perbankan; Vol 16 No 2 (2013): OCTOBER; 149-166
2460-9196
1410-8046
10.21098/bemp.v16i2
 
Language ind
 
Relation https://www.bmeb-bi.org/index.php/BEMP/article/view/30/22
 
Rights Copyright (c) 2015 Darius Tirtosuharto, Handri Adiwilaga