Does Inflation Respond to Interest Rates Changes?
- https://doi.org/10.2991/aebmr.k.200331.034How to use a DOI?
- inflation, interest rates, Granger Causality Test, vector auto regression
This study aims to analyse the response of inflation to changes in interest rates in Indonesia, thus analysing the inter-relations between the two variables. The analysis uses the Granger Causality Test and Impulse Response Function approach to monthly time series data for the period January 2014 to June 2018, which includes Consumer Price Index, SBI Interest Rates, Interbank Money Market Interest Rates and Deposit Interest Rates. There is one-direction causality between the SBSBI and CPI. The government responded to the inflation rate by making SBSI adjustments this indicates the operation of monetary policy. The impact of changes in the inflation rate to SBSI lasted for six months. SBSI Adjustments are transmitted on the money market through deposits and credit. Changes in deposit and credit interest rates were responded to by inflation.
- © 2020, the Authors. Published by Atlantis Press.
- Open Access
- This is an open access article distributed under the CC BY-NC license (http://creativecommons.org/licenses/by-nc/4.0/).
Cite this article
TY - CONF AU - Rama Chandra AU - Sumitro Sumitro PY - 2020 DA - 2020/04/06 TI - Does Inflation Respond to Interest Rates Changes? BT - Proceedings of the 6th Annual International Conference on Management Research (AICMaR 2019) PB - Atlantis Press SP - 156 EP - 159 SN - 2352-5428 UR - https://doi.org/10.2991/aebmr.k.200331.034 DO - https://doi.org/10.2991/aebmr.k.200331.034 ID - Chandra2020 ER -