Universitas Gadjah Mada
Faculty of Economics and Business

The event titled Dissemination on How the New policy Regime Influence Inflation and Business Persons Rationality (2/12/2015) presented Rimawan Pradiptyo, Akhmad Akbar, Abraham Wirotomo, Yudhistira Permana, and Alvin Adisasmita as researchers and Berly Mertawardaya as the panelist. The event presented two results of study on how the BBM new policy regime influence inflation and rationality of Indonesian business doers. The first study uses econometrics approach while the second one uses behavioral economics.

The research indicates that the elasticity between price commodities and fuel is not symmetrical.  The research uses data from 66 districts in Indonesia, which shows that the commodities price is more elastic when the fuel price is increased than when the fuel price is decreased. Other research shows that business tend to be risk averse, the data used is from the merchants and producers in Yogyakarta and Pontianak. The uncertainty of when and how much the fuel price will change will trigger expected inflation.

Berly responded that the result of the study is a precious information for government to formalize strategies in overcoming inflation caused by the change of gas price. Berly also mentioned about the prisoner dilemma condition in which business persons are trying their best to keep the revenue by increasing the price of commodities when the gas fuel price was increased. This condition, according to Berly, will have negative impacts to economics condition in general. Using sampel from Yogyakarta and Pontianak, the study pictured on how the difference on gas access will influence on how business doers respond to the change of gas price.

Source: p2eb.feb