THE ROLE OF PALM OIL PRICE IN INDONESIA’S AGGREGATE DEMAND

  • Susan Sunila Sharma Deakin Business School, Deakin University
Keywords: Palm oil price, Aggregate demand, Time-series, Predictability

Abstract

This study examines the predictability of Indonesia’s aggregate demand using palm oil price. We conduct both in-sample and out-of-sample forecasting evaluations. These evaluations are based on time-series quarterly and monthly data frequencies and cover three different forecasting horizons. Overall, we find that palm oil price predicts real GDP, consumption expenditure, total investment, net spending from overseas, while predictability of government spending is sensitive to the use of forecasting approaches and horizons.

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Published
2020-09-10
How to Cite
Sharma, S. (2020). THE ROLE OF PALM OIL PRICE IN INDONESIA’S AGGREGATE DEMAND. Buletin Ekonomi Moneter Dan Perbankan, 23(2), 161 - 178. https://doi.org/10.21098/bemp.v23i2.1305
Section
Articles