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The Covid-19 Pandemic and Inflation in Indonesia

Aulia Rayna Asmadina, Ariodillah Hidayat, Imam Asngari and Sri Andaiyani
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Aulia Rayna Asmadina: Department of Development Economics, Faculty of Economics,Sriwijaya University, Indonesia
Ariodillah Hidayat: Department of Development Economics, Faculty of Economics,Sriwijaya,University, Indonesia
Imam Asngari: Department of Development Economics, Faculty of Economics,Sriwijaya,University, Indonesia
Sri Andaiyani: Department of Development Economics, Faculty of Economics,Sriwijaya,University, Indonesia

Romanian Journal of Economics, 2021, vol. 53, issue 2(62), 27-39

Abstract: The Indonesian government has implemented a social distance policy that aims to break the chain of the pandemic that has a large impact on the economy which causes an increase in unemployment, poverty, and the inflationary gap. This study aims to determine what factors affect inflation in Indonesia from the beginning of the time Covid-19 pandemic. The data used is secondary data that has been collected and processed from January 2019 to December 2020. The analysis method used is the Error Correction Model method. The results showed that the level of credit distribution and the exchange rate had a positive effect on the inflation rate in Indonesia both in the short-run and in the long run. Furthermore, exports and the Covid-19 had a negative and significant effect on the inflation rate in Indonesia in the short and long term.

Keywords: Inflation; Credit Distribution Rate; Export; Exchange Rate; Covid-19 (search for similar items in EconPapers)
JEL-codes: A10 E30 E31 (search for similar items in EconPapers)
Date: 2021
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