Aziz, Abdul, Chamidah, Nur and Saifudin, Toha (2025) Predicting inflation in Indonesia using BI-Predictors semiparametric model based on local polynomial estimator. Presented at UNSPECIFIED. (Unpublished)
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Abstract
Inflation is a condition of general and continuous increases in the prices of goods and services over a certain period. High and fluctuating inflation rates are a sign of economic instability. This fluctuating nature is due to factors that influence it, causing the relationship patterns in the data not to form a certain pattern, which is also used for predictions. This research applies a semiparametric regression model, which combines parametric and nonparametric models, using a local polynomial estimator for inflation data with two factors that influence inflation, namely the Bank Indonesia (BI) interest rate in one previous month and the change rate of Money Supply in one previous month. The local polynomial method estimates nonparametric functions by considering the local polynomial order and the optimum bandwidth value based on the lowest GCV value. This research obtained a semiparametric regression model with an optimum bandwidth value of order 1, with high accuracy (MAPE 9.61%). The inflation predictions for September 2024, where the value is not yet known, with the BI interest rate and the change rate of money supply values in one previous month, using the model resulted in this research; the predicted value is 1.84%.
| Item Type: | Seminar and Workshop |
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| Keywords: | BI rate; inflation; local polynomial; money supply; semiparametric |
| Subjects: | 01 MATHEMATICAL SCIENCES > 0102 Applied Mathematics > 010205 Financial Mathematics 01 MATHEMATICAL SCIENCES > 0104 Statistics > 010401 Applied Statistics 14 ECONOMICS > 1401 Economic Theory > 140102 Macroeconomic Theory 14 ECONOMICS > 1403 Econometrics > 140302 Econometric and Statistical Methods 14 ECONOMICS > 1403 Econometrics > 140305 Time-Series Analysis |
| Divisions: | Faculty of Mathematics and Sciences > Department of Mathematics |
| Depositing User: | Mr. Abdul Aziz |
| Date Deposited: | 13 Jun 2025 09:50 |
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