Pengujian Trilemma Conditions pada Perekonomian Indonesia
January 2017  //  DOI: 10.21002/jepi.v17i2.718
Mela Yunita, Noer Azam Achsani, Lukytawati Anggraeni

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Abstract

Testing the Trilemma Conditions of Indonesian EconomyThe key challenge for monetary policy in emerging market countries is simultaneously maintain monetary independence, exchange rate stability, and join with financial integration. This reseach explain the interaction of monetary policy in Indonesia over time to answer those three challenge with a Trilemma conditions. This research evaluate the Bank Indonesia's decision to change the exchange rate regime and apllied ”inflation targeting”. The methods include to build the Trilemma' index and testing the Trilemma with constant regression. The results indicate that Bank Indonesia has tradeoff in determining the combination of monetary policy objectives. Tradeoff for Bank Indonesia more heavy under free floating due to fear of floating's problem and tradeoff lighter when inflation targeting applied.

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  • Eye Icon 540 views
  • Download Icon 657 downloads
Metrics Icon 540 views  //  657 downloads