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Intervention Model Indonesia's Inflation Due to Rising Fuel Prices

S. Rahardiantoro, R. Budiarti, B. Sartono

Abstract



Indonesia's economic development is inseparable from the prevailing inflation. One of the determinants of inflation, namely rising fuel prices at a certain time. Skyrocketing fuel prices will have an impact on the increase in inflation, either directly or in stages. In June 2013 inflation reached 1.03 and then in July 2013 raised again until 3.29 caused by the increasing of fuel price from Rp 4500,00 to be Rp 6500,00. Inflation volatility due to rising fuel prices can not be directly modeled time series regardless of the effect of the rise and fall of inflation volatility. This effect can be modeled by an intervention model that saw the rise and fall of inflation due to rising fuel prices. This paper sought intervention model of time series data of inflation in Indonesia in 2006 through 2013 with the development of forecasting for some decades to come.The result, the orde of intervention effects are b = 1, r = 0, and s = 1.

Keywords


Fuel price, inflation, intervention model, time series analysis

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