Regional Inflation Persistence and Household Purchasing Power in Emerging Urban Economies
Keywords:
regional inflation, inflation persistence, purchasing power, urban economy, food prices, IndonesiaAbstract
This integrative review examines the following Indonesia-focused question: Why does inflation remain persistent across Indonesian urban regions, and through which channels does that persistence erode household purchasing power? The analysis treats regional inflation as a conditional economic mechanism rather than a stand-alone headline indicator and evaluates how it interacts with inflation persistence. For regional inflation, peer-reviewed research is read together with current official statistical and policy material, with Indonesia-specific evidence given priority and international studies used to clarify mechanisms. Across the reviewed material, the effect of regional inflation varies with exposure, timing, market structure, institutional arrangements, and the capacity of decision makers to adjust. The article therefore develops a mechanism-based interpretation that distinguishes first-round transmission, behavioral response, and boundary conditions for inflation persistence. No primary survey, interview, firm observation, or regression estimate is manufactured for this regional inflation conceptual review; empirical claims remain attributed to their original sources. The resulting regional inflation framework supports differentiated measurement and identifies an Indonesia-specific research agenda for testing the proposed channels with more granular data.
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References
Aginta, H. (2022). Spatiotemporal analysis of regional inflation in an emerging country: The case of Indonesia. Regional Science Policy & Practice, 14(3), 667-688. https://doi.org/10.1111/rsp3.12539
Arimurti, T., & Trisnanto, B. (2011). Persistence of inflation in Jakarta and its implication on the regional inflation control policy. Bulletin of Monetary Economics and Banking, 14(1), 5-30.
Purwono, R., Yasin, M. Z., & Mubin, M. K. (2020). Explaining regional inflation programmes in Indonesia: Does inflation rate converge? Economic Change and Restructuring, 53, 1-20.
International Monetary Fund. (2023). Indonesia: 2023 Article IV Consultation - Press Release; Staff Report; and Statement by the Executive Director for Indonesia. IMF Country Report No. 23/221. https://doi.org/10.5089/9798400244988.002
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Copyright (c) 2026 Maya Ariyanti, Ir. Nida Garnida Fitrianti, MSI (Author)

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