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Understanding Indonesia’s city-level consumer price formation: Implications for price stability

Narayan, Paresh Kumar 2019, Understanding Indonesia’s city-level consumer price formation: Implications for price stability, Bulletin of Monetary Economics and Banking, vol. 22, no. 4, pp. 405-422, doi: 10.21098/bemp.v22i4.1239.

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Title Understanding Indonesia’s city-level consumer price formation: Implications for price stability
Author(s) Narayan, Paresh KumarORCID iD for Narayan, Paresh Kumar orcid.org/0000-0001-7934-8146
Journal name Bulletin of Monetary Economics and Banking
Volume number 22
Issue number 4
Start page 405
End page 422
Total pages 18
Publisher Bank Indonesia Institute
Place of publication Jakarta, Indonesia
Publication date 2019-12-31
ISSN 1410-8046
2460-9196
Keyword(s) Consumer Price Index
Cities
Price discovery
Bank Indonesia
Summary Using the Consumer Price Index (CPI) data of 82 Indonesian cities, we propose the hypothesis of heterogeneity in the cities’ contribution to the aggregate Indonesian CPI. Using a price discovery model fitted to monthly data, we discover that (1) of the 23 cities in the province of Sumatera, five contribute 44% and nine contribute 66.7% to price changes, and (2) of the 26 cities in Java, four alone contribute 41.6% to price changes. Even in smaller provinces, such as Bali and Nusa Tenggara, one city alone dominates the change in aggregate CPI. From these results, we draw implications for maintaining price stability.
Language eng
DOI 10.21098/bemp.v22i4.1239
Indigenous content off
HERDC Research category C1 Refereed article in a scholarly journal
ERA Research output type C Journal article
Copyright notice ©2019, Bank Indonesia Institute
Free to Read? Yes
Use Rights Creative Commons Attribution non-commercial licence
Persistent URL http://hdl.handle.net/10536/DRO/DU:30135488

Document type: Journal Article
Collections: Faculty of Business and Law
Deakin Business School
Open Access Collection
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