Effect of Globalization on Inflation Rate in Indonesia

Abstract

The study examines the influence of globalization and global output equivalence to inflation in Indonesia, through supply and demand goods and services. The study also proves the Philips curve on relationship between the unemployment and inflation in the scheme of the effect of global economic on domestic. By using time series data and regression model of global and domestic data, the estimation results of the study shows that the global output play a role direct and indirectly to the domestic output and inflation.