THE OPTIMAL MONETARY POLICY INSTRUMENTS: THE CASE OF INDONESIA
Abstract
In 1999, the central bank of Indonesia, Bank Indonesia, gained its independence. The new Central Bank Act has established a more explicit foundation for Bank Indonesia’s independence. Firstly, goal independence, in which Bank Indonesia sets its own monetary target. Secondly, instrument independence, in which Bank Indonesia implements various policy instruments to achieve that target. The primary objective of Bank Indonesia (henceforth BI) is to achieve and maintain price stability reflected in a low and stable inflation rate.
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References
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Clarida, Richard and Jodi Gali, Sources of Real Exchange Rate Fluctuations : How important are nominal shocks ?, NBER Working Paper No. 4658, 1994.
Enders, Walter, Applied Econometric Time Series, John Wiley and Sons, 1995.
Harvey, AC, The Econometric Analysis of Time Series, Phillip Alan, 1981.
Obstfeld, Maurice, Floating Exchange Rate : Experience and Prospects, Brooking Papers on Economic Activity 2, 1985.
Obstfeld, Maurice and Kenneth Rogoff, Foundation of International Macroeconomics, MIT Press, 1999.
Poole, William, Optimal Choice of Monetary Policy Instruments in a Simple Stochastic Macro Model, Quarterly Journal of Economics 84, pp. 197-216, 1970.
Siswanto, Benny and Doddy B. Waluyo, The Role of Indonesian Rupiah Exchange Rates, Buletin Moneter Ekonomi dan Perbankan, Bank Indonesia, Volume 1 No. 1, July 1998.
Sarwono, Hartadi and Perry Warjiyo, Indonesia’s new monetary policy framework under the flexible exchange rate, Buletin Moneter Ekonomi dan Perbankan, Bank Indonesia, Volume 1 No. 1, July 1998.
Published
2003-10-11
How to Cite
Affandi, Y. (2003). THE OPTIMAL MONETARY POLICY INSTRUMENTS: THE CASE OF INDONESIA. Buletin Ekonomi Moneter Dan Perbankan, 5(3), 56-70. https://doi.org/10.21098/bemp.v5i3.313
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Buletin Ekonomi Moneter dan Perbankan / Bulletin of Monetary Economics and Banking is licensed under a Creative Commons Attribution-NonCommercial 4.0 International License.
