Forecasting performance of the P-star model: The case of Indonesia

Tang, M.M.-J. and Puah, Chin-Hong and Affendy Arip, M. and Dayang-Affizzah, A.M. (2015) Forecasting performance of the P-star model: The case of Indonesia. Journal of International Business and Economics, 15 (2). pp. 7-12. ISSN 1544-8037

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Abstract

This paper investigated the linkage between money supply and inflation in Indonesia by adopting the PStar model. Both the simple-sum and Divisia monetary aggregates were employed to compare their relative performance in terms of inflation forecasting. The empirical findings revealed that the P-Star model performed well in tracking inflation in Indonesia. In addition, the Divisia M2 model returned better results with greater prediction information on inflationary movement in Indonesia.

Item Type: Article
Uncontrolled Keywords: Divisia money; Monetary policy; P-star model, unimas, university, universiti, Borneo, Malaysia, Sarawak, Kuching, Samarahan, ipta, education, research, Universiti Malaysia Sarawak
Subjects: H Social Sciences > HB Economic Theory
Divisions: Academic Faculties, Institutes and Centres > Faculty of Economics and Business
Depositing User: Karen Kornalius
Date Deposited: 28 Jul 2016 03:45
Last Modified: 28 Jul 2016 03:45
URI: http://ir.unimas.my/id/eprint/12711

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