| dc.description.abstract | The development of the theory of dynamic inflation begins by linking wage
inflation and unemployment. In further developments, factor of expectation is
classified into inflation model. In measuring the factor of expectation emerges a
debate about the use of variable Jag inflation or expectation inflation. Lag variable
represents the backward-loolcing behavior 'while expectation inflation represents the
behavior of forward looking.
The study used inflation data is important for ASEAN, because ASEAN is one
of the strengths of the international economy. This study analyzes the dynamics of
inflation in the ASEAN using framework the New-Keynesian Phillips Curve
(NKPC)model. The data used is the quarterly panel data from 10 ASEAN members in
the period 2005.1 - 2013.IV.The study of this dynamic inflation applies quarter to
quarter inflation data, meaning that the inflation rate is the percentage change in the
general price of the current quarter compared to last quarter genera] price divided by
the last quarter. The empirical results are estimated by using the Generalized Method
of Moment (GMM), both of the system and first different indicates that the pattern
formation of inflation expectations are backward-looking and forward-looking. In
addition, the estimated NKPC models show the backward-looking behavior is more
dominant than the forward looking. Changes in inflation are not entirely influenced
by expectations of inflation in each country. Changes in inflation are also influenced
by the output gap, changes in money supply, and exchange rate.
Based on the findings of this study, it can be concluded that the NKPC models
can explain the dynamics of inflation in each country in the ASEAN
region. Significance of parameter estimates backward-looking, forward-looking, and
the output gap indicate that the hypothesis of this model is proved to be
true. However, the hypothesis that the forward looking behavior is more dominant
than backward looking is not found. | en_US |
