Abstract
AbstractThis study analyzes regional inflation dynamics in Indonesia through a spatiotemporal context. We employ an exploratory space–time data analysis (ESTDA) on inflation data and its components of 34 provinces in Indonesia during three different episodes between 2012 and 2019: rising inflation (2012–2013), declining inflation (2014–2015), and stable inflation (2018–2019). We discover a variety of spatially coordinated movements in inflation dynamics across the episodes, implying the transmission of price changes in a particular region to neighboring regions. The foodstuffs component appears to be the primary source of the spatial process of aggregate inflation. Our findings have significant implications for the relevance of including spatial dimension in analyzing and formulating policy measures to control regional inflation in Indonesia.
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