The influence of food price fluctuation on inflation in Padang Sidempuan City, North Sumatera Province

Abstract

One contributor to inflation in North Sumatra is food, therefore we need to discuss this topic in North Sumatra Province. This study analyses how the development of the price of food commodities (rice, red chili, cooking oil, broiler chicken eggs, purebred eggs, and corn) in Padang Sidempuan City. The purpose of this study is to identify the effect of fluctuations in the price of food commodities (rice, red chili, cooking oil, broiler chicken, broiler eggs and corn) on inflation in Padang Sidempuan City by using the VAR (Vector Autoregression) method. VAR analysis was conducted to analyse the effect of fluctuations in food commodity prices on inflation in Padang Sidempuan City. In the short term there are only two that are significant at a 5% confidence interval namely D (INF (-1), D (INF (-2)), whereas in the long run, there are four of the six significant variables namely D (BRS (-1), D (MKG (-1), D (DGA (-1), D (TAR (-1), D (JGG (-1)) These variables are said to have a significant effect on inflation in Padang Sidempuan City because of its absolute value The t-statistic variable is greater than the t-table (1.67065).