Inflation and Its Uncertainty: Evidence from Indonesia and the Philippines

Q2 Economics, Econometrics and Finance Global Journal of Emerging Market Economies Pub Date : 2023-04-18 DOI:10.1177/09749101221149873
H. Kuncoro
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Abstract

This article investigates the relationship between inflation and its uncertainty under the inflation-targeting regime in Indonesia and the Philippines over 2005(7)–2021(12). The Kernel density function and entropy index applications reveal that the price level in both countries is heterogeneous. The non-linear quantile regression estimation shows that inflation affects inflation uncertainty positively. Inflation more likely induces its uncertainty in higher quantiles. The effect exhibits an inconsistent linearity property. While the symmetric behavior holds in the Philippines, inflation in the case of Indonesia affects the inflation uncertainty differently, not only inter-quantiles but also intra-quantiles. Given that Indonesia and the Philippines have low inflation rates relative to other emerging markets, our findings suggest that announcing higher inflation targets may be costly to provoke higher inflation uncertainty. Accordingly, controlling inflation uncertainty in the inflation-targeting regime can be achieved if monetary policy is credible and independent.
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通货膨胀及其不确定性:来自印度尼西亚和菲律宾的证据
本文研究了2005年(7)-2021年(12)印度尼西亚和菲律宾通胀目标制下通胀与其不确定性之间的关系。核密度函数和熵指数的应用表明,两国的物价水平存在异质性。非线性分位数回归估计表明,通货膨胀正影响通货膨胀不确定性。通货膨胀更有可能在更高的分位数上引发不确定性。该效应表现出不一致的线性特性。虽然这种对称行为在菲律宾成立,但印度尼西亚的通货膨胀对通货膨胀不确定性的影响不同,不仅在分位数之间,而且在分位数内。鉴于印尼和菲律宾相对于其他新兴市场的通胀率较低,我们的研究结果表明,宣布更高的通胀目标可能会引发更高的通胀不确定性。因此,如果货币政策是可信和独立的,那么控制通胀目标制下的通胀不确定性是可以实现的。
本文章由计算机程序翻译,如有差异,请以英文原文为准。
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来源期刊
Global Journal of Emerging Market Economies
Global Journal of Emerging Market Economies Economics, Econometrics and Finance-Economics, Econometrics and Finance (miscellaneous)
CiteScore
2.70
自引率
0.00%
发文量
27
期刊介绍: Global Journal of Emerging Market Economies is a peer-reviewed journal. The aim of the journal is to provide an international platform for knowledge sharing, discussion and networking on the various aspects related to emerging market economies through publications of original research. It aims to make available basic reference material for policy-makers, business executives and researchers interested in issues of fundamental importance to the economic prospects and performance of emerging market economies. The topics for discussion are related to the following general categories: D. Microeconomics E. Macroeconomics and Monetary Economics F. International Economics G. Financial Economics H. Public Economics I. Health, Education, and Welfare J. Labor and Demographic Economics L. Industrial Organization O. Economic Development, Innovation, Technological Change, and Growth Q. Agricultural and Natural Resource Economics • Environmental and Ecological Economics R. Urban, Rural, Regional, Real Estate, and Transportation Economics Additionally, the journal would be most interested to publish topics related to Global Financial Crisis and the Impact on Emerging Market Economies Economic Development and Inclusive Growth Climate Change and Energy Infrastructure Development and Public Private Partnerships Capital Flows to and from Emerging Market Economies Regional Cooperation Trade and Investment and Development of National and Regional Financial Markets The Belt and Road Initiative.
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