Inflation Volatility in Indonesia Using ARIMA Model: Before and During COVID-19

Setyo Tri Wahyudi, Rihana Sofie Nabella and Kartika Sari

A chapter in Environmental, Social, and Governance Perspectives on Economic Development in Asia, 2021, vol. 29A, pp 151-168 from Emerald Group Publishing Limited

Abstract: This study examines the volatility of inflation in Indonesia before and during COVID-19, focusing on people’s purchasing power. The high inflation variability makes future price expectations uncertain, creating risks in the long run and uncertainty in wealth redistribution. The ARIMA model was used from January 2005 to June 2020. The results show that the ARMA (0.1) model is suitable for testing inflation volatility in Indonesia. Forecasting results show that inflation for the next six months will still be under pressure due to COVID-19.

Keywords: Inflation; inflation volatility; ARIMA; price level; inflation forecasting; COVID-19; C22; E52 (search for similar items in EconPapers)
Date: 2021
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Persistent link: https://EconPapers.repec.org/RePEc:eme:isetez:s1571-03862021000029a024

DOI: 10.1108/S1571-03862021000029A024

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