Mekanisme Transmisi Efek Fluktuasi Harga Minyak Dunia Terhadap Makroekonomi Di Indonesia (Model Is-Mp-Pc)

Abstract

The issue of world oil price fluctuations has been a concern in recent decades, as countries in the world both exporting and oil importing countries are affected by world oil price fluctuations. Indonesia as a country that has the characteristics of small open economy certainly can not be separated from the effects of world oil price shocks. This study aims to see whether or not the effect of short-term and long-term effects of world oil price fluctuations on macroeconomics in Indonesia from 1985 to 2016 using the Vector Error Correction Model (VECM). The Indonesian macroeconomic variables used are economic growth, exchange rate, government expenditure and tax revenue included into Investment-Saving (Model IS), interest rate included into Monetary Policy (MP Model), and inflation included into Philips Curve (PC Model). Impulse response functions (IRF) are used to describe the response of world oil price shocks to macroeconomics in Indonesia. The results of this study indicate that in the short term the variables of economic growth, inflation, interest rates, and government spending included in the IS-MP-PC model were positively influenced by fluctuations in world oil prices in the previous year.. However, in the long run only four variables that have a significant effect on the effects of world oil price fluctuations include inflation, interest rates, government spending and tax revenues. While the mechanism of the effect of world oil price fluctuation is more dominantly transmitted through inflation, interest rate and government expenditure.. Overall all macroeconomic variables show stability response in the period of 10 to the end of the period. However, of all variables only economic growth variables and exchange rates that respond negatively to the effects of world oil price fluctuations.