Tag: E31

INFLATION AND UNEMPLOYMENT IN SOUTHEAST ASIAN COUNTRIES: A PANEL GMM APPLICATION ON PHILLIPS CURVE

ALIASUDDIN

Associate Professor at the Department of Economics, Faculty of Economics and Business, Universitas Syiah Kuala, Banda Aceh, Indonesia

aliasuddin@unsyiah.ac.id

Sofyan SYAHNUR

Associate Professor at the Department of Economics, Faculty of Economics and Business,Universitas Syiah Kuala, Banda Aceh, Indonesia

kabari_sofyan@unsyiah.ac.id

MALIA

Graduate Student at the Department of Economics, Faculty of Economics and Business, Universitas Syiah Kuala, Banda Aceh, Indonesia

malia1980@mhs.unsyiah.ac.id

Abstract

This study aims to analyze the relationship between inflation and unemployment in 10 Southeast Asian from 1996 to 2016 using 210 data samples. The estimation results, using the GMM panel method, showed that the use of Instrument Variables (IV) is valid for the model and the results show a negative and significant relationship between inflation and unemployment. The optimal value of inflation and unemployment for the Southeast Asian Region were found to be 4 percent and 8 percent respectively. This means that a trade-off has taken place. Thus, the existence of the Phillips Curve in Southeast Asian countries during the period of 1996-2016 can be proven. In accordance with the Phillips Curve review, if the trade-off occurs, the government cannot resolve both problems simultaneously. In other words, policy makers must be able to choose the problem to be addressed first, either by implementing monetary policy, fiscal policy or both, so that economic stability and public welfare are maintained.

Keywords: Inflation, Unemployment, Phillips Curve, Panel GMM, Southeast Asia.

JEL classification: E24, E31, C23, J01

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EFFECT OF INFLATION ON TOTAL DEPOSITS AND FINANCING OF SHARIA COMMERCIAL BANKS: A MONTHLY DATA EVIDENCE FROM INDONESIA

IKHSAN

Senior Lecturer, Faculty of Economics and Business, UniversitasSyiah Kuala, Banda Aceh, Indonesia

ikhsan30303@unsyiah.ac.id

Cut Dian FITRI

Lecturer, Faculty of Islamic Economics and Business, Universitas Islam Negeri Ar-raniry, Banda Aceh, Indonesia

cutdianfitri@ar-raniry.ac.id

Hafiizh MAULANA

Lecturer, Faculty of Islamic Economics and Business, Universitas Islam Negeri Ar-raniry, Banda Aceh, Indonesia

hafiizh.maulana@ar-raniry.ac.id

Khairul AMRI

Lecturer, Faculty of Islamic Economics and Business, Universitas Islam Negeri Ar-raniry, Banda Aceh, Indonesia

khairul.amri@ar-raniry.ac.id

(corresponding author)

Abstract

The main purpose of the paper is to determine the effect of inflation on total deposits and the financing of sharia commercial banks in Indonesia. A monthly time series data over the period of 2012.1-2017.6 was analyzed using Johansen Co-integration test, vector error correction model, and Granger causality test. The co-integration test indicates that there is a long-run relationship between the variables. In the long-run, inflation is negatively related to total deposits and sharia financing. In the short-run, the inflation has no significant effect on the two variables. The sharia financing has a negative effect on itself at the 1 and 2-month period. The result of the Granger causality test points out that there is a bidirectional causality relationship between total deposits and sharia financing. Furthermore, unidirectional causality running from the inflation to sharia financing and from total deposits to the inflation.

Keywords: Inflation, Total Deposits, Sharia Financing, VECM, and Granger Causality Test

JEL classification: E31, E51, G21, N15

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EFFECT OF COMMODITY PRICES ON INFLATION PERSISTENCE: PARTIAL ADJUSTMENT APPROACH

SURIANI

Department of Islamic Economics, Faculty of Economics and Business, Universitas Syiah Kuala, Banda Aceh, Indonesia

suriani@unsyiah.ac.id

Fuad RIDZQI

Department of Development of Economics, Faculty of Economics and Business, Universitas Syiah Kuala, Banda Aceh, Indonesia

fuadrizqi@rocketmail.com

Abstract

The objective of this study is to measure the inflation persistence level in Aceh Province. By using the autoregressive model, the level of persistence counted in general and the level of inflation persistence of commodity groups counted from forming consumer price index (CPI). In addition, this study also explores the source of inflation pressure from these commodity groups by using a partial adjustment model (Partial Adjustment Model). The observation period is the year 2005-2014 using monthly data. The results of this study found that the inflation persistence rate in Aceh Province was relatively low. However, there are several inflation rate variables for CPI commodity groups that exceed the inflation persistence level in common. The source of inflationary pressure discovered also comes from two variables with relatively high persistence levels from other variables, namely foodstuff commodity group variables (BM) and housing, water, electricity, gas, fuel (PERAL) commodity groups. These variables represent the components of inflation of volatile foods and administered price inflation. This study provides recommendations to relevant policymaker in coordinating, preventing, and overcoming the effects of volatile foods and administered prices on inflation by maintaining the supply of goods (supply stock) and regulating prices that are in line with people’s purchasing power

Keywords: Inflation Persistence, Autoregressive, Commodity Prices

JEL classification: C22, E31, E52
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