Journal ID : TRKU-03-01-2021-11383
[This article belongs to Volume - 63, Issue - 01]
Total View : 404

Title : Modeling Vector Autoregressive (VAR) on Inflation in The City of Surabaya and Probolinggo

Abstract :

Inflation is one of the things that plays an important role in the economy, so it needs to be considered. The cities of Surabaya and Probolinggo are located in the same province. The inflation of the two cities affects each other. This is proven by the Granger causality test. The modeling for inflation in the two cities is VAR (1). Impulse response analysis and variance decomposition were carried out as a follow-up analysis to determine the response of endogenous variables in the event of a shock. The shock to the inflation rate that occurred gave different responses to the two cities. The analysis and modeling carried out aims to enable Bank Indonesia and the local government to predict and formulate appropriate policies for the welfare of local communities.

Full article