Abstract
<p class="Abstract-Title">Inflation is one of the macroeconomic variables of concern to the government in addition to economic growth, unemployment and poverty. Inflation is measured by the Consumer Price Index (CPI). According to the quantity theory of the classics, argues that the price level is determined by the amount of money in circulation, prices will rise if there is an increase in the money supply, assuming the amount of goods offered is fixed, while the amount of money is doubled, sooner or later the price will doubled. Often the relationship between macroeconomic variables is not always linear, it can be exponential, logarithmic, or highly fluctuating patterns. This nonlinear relationship cannot be forced using parametric regression which generally uses the Ordinary Least Square (OLS) or Maximum Likelihood Estimation (MLE) which often implies the existence of certain distributions and linear data patterns. In some literatures, researches using a linear model with OLS, for describing the relationship between CPI and money supply. This research uses several non parametric approaches, namely kernel and <em>spline</em> functions. The results obtained are a strong positive relationship between money supply and CPI, where money supply has a significantly positive effect on CPI. The most suitable non parametric method to describe the relationship pattern between CPI and money supply is the smoothing <em>spline</em> method with Generalized Cross Validation (GCV) parameter optimization method with the smallest RMSE and MAPE criteria and functions that can follow data patterns smoothly.</p><p class="Abstract-Title"><strong>Keywords</strong>: CPI, money supply, non parametric, kernel, <em>spline</em>.</p>
Highlights
Inflasi adalah salah satu variabel makroekonomi yang menjadi perhatian pemerintah selain pertumbuhan ekonomi, pengangguran, dan kemiskinan
Inflation is measured by the Consumer Price Index
that the price level is determined by the amount of money
Summary
Inflasi adalah salah satu variabel makroekonomi yang menjadi perhatian pemerintah selain pertumbuhan ekonomi, pengangguran, dan kemiskinan. Inflasi dapat diartikan adanya kecenderungan kenaikan harga barang atau jasa secara terus menerus dan kenaikan tersebut meluas ke seluruh sektor perekonomian yang lain karena ketidakseimbangan arus uang dan barang yang tersedia. Keeratan hubungan inflasi dengan jumlah uang beredar tidak dapat dilihat dalam jangka pendek. Teori inflasi ini bekerja paling baik dalam jangka panjang, bukan dalam jangka pendek, dengan demikian hubungan antara pertumbuhan uang dan inflasi dalam data bulanan tidak akan seerat hubungan keduanya jika dilihat selama periode 10 tahun. Faktor dari luar negeri lebih disebabkan oleh tingkat keterbukaan perekonomian dari suatu negara terhadap ekonomi dunia yang dapat dilihat dari neraca pembayarannya baik neraca perdagangan (current account) ataupun neraca modal (capital account). Menurut Mankiw [1] dalam keadaan seimbang, suatu perekonomian tingkat harga dipengaruhi oleh jumlah uang beredar sehingga dapat dikatakan adanya keeratan hubungan tingkat harga (inflasi) dan jumlah uang beredar tidak dapat dilihat dalam jangka pendek. Berdasarkan permasalahan di atas, peneliti ingin mengidentifikasi pola hubungan jumlah uang beredar terhadap inflasi (yang diaproksimasi dengan IHK) dengan pendekatan regresi nonparametrik
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