Title:
ANALYSIS OF MONETARY POLICY TRANSMISSION THROUGH INFLATION EXPECTATIONS: INDONESIA, CHINA, INDIA (ICI)

Authors:
Ahmad Albar Tanjung, Annisa Anggreini Siswanto, Indonesia

Abstract:

This study aims to analyze monetary policy through inflation expectations in Indonesia, China, India (ICI). This study used secondary data from 2000 to 2019—data analysis model with Panel Vector Error Correction Model (PVECM). The results of the PVECM analysis through the inflation expectations line show that the control of economic stability of the ICI country is carried out by variable inflation expectations and gross domestic product in the short term. It is carried out by variable interest rates, inflation expectations, and investment in the long run. The results of the IRF analysis show that the response stability of all variables is formed in the medium and long-term periods. The results of the FEVD analysis show that there are variables that have the most significant contribution in the variable itself, either in the short, medium, or long term. The interaction analysis results of each variable transmission of monetary policy show that the path of interest rates and inflation expectations can maintain and control the economic stability of the ICI country.