Regional Inflation Persistence and Household Purchasing Power in Emerging Urban Economies

Abstract

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.