| Summary: | Control over the rate of inflation is absolutely necessary because of the
inflationary impact of the huge socio-economic conditions. For that to be
investigated components forming inflationary impact of general inflation. These
components are core inflation, administered prices inflation and volatile goods
inflation. This study aims to determine how much influence the inflation
component of commodity prices are influenced by government policy
(administered prices), volatile price inflation (volatile goods), and core inflation to
general inflation.
This study aimed to analyze the relationship between the components of
inflation to general inflation and analyze the effect of administered prices inflation
directly to core inflation and the indirect influence of the volatile goods inflation.
Quantitative analysis performed using Structural Equation Model (SEM),
integrated with path analysis (path diagram). The results showed that the
administered prices inflation affect core inflation directly and indirectly affect the
increase in administered prices inflation causing volatile goods inflation rose by
rising core inflation. Each component is inflation, core inflation, volatile goods,
and administered prices inflation positive effect of general inflation. Core
inflation is influenced by the increase in administered prices and volatile foods
goods through aftereffect (second round effects) which affect general inflation.
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