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

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.

Citation

Wahyudi, S.T., Nabella, R.S. and Sari, K. (2021), "Inflation Volatility in Indonesia Using ARIMA Model: Before and During COVID-19", Barnett, W.A. and Sergi, B.S. (Ed.) Environmental, Social, and Governance Perspectives on Economic Development in Asia (International Symposia in Economic Theory and Econometrics, Vol. 29A), Emerald Publishing Limited, Leeds, pp. 151-168. https://doi.org/10.1108/S1571-03862021000029A024