Modeling the Farmer Exchange Rate in Indonesia Using the Vector Error Correction Model Method
DOI:
https://doi.org/10.30812/matrik.v23i2.3407Keywords:
Agriculture, Farmer Exchange Rate, Vector Error Correction Model, Vector Error Correction ModelAbstract
The agricultural sector plays a crucial role in the Indonesian economy. However, the farm sector still has serious problems, including agricultural product prices, which often fall when the harvest supply is abundant. So often, the income obtained is not proportional to the price spent by farmers, which has an impact on decreasing the welfare of farmers. An indicator to observe changes in the interest of Indonesian farmers is the Farmer Exchange Rate Index (NTP). This study aims to form a model and project the welfare level of farmers in Indonesia, focusing on NTP indicators, which are caused by the influence of variables such as inflation, Gross Domestic Product (GDP), interest rates, and the rupiah exchange rate. The method used is the Vector Error Correction Model (VECM), used when there are indications that the research variables do not show stability at the initial level and there is a cointegration relationship. The results of this study show that in the long run, significant factors affecting NTP are inflation, interest rates, and the rupiah exchange rate. Meanwhile, in the short term, the variables that have an impact are GDP and the rupiah exchange rate. The resulting VECM model shows a MAPE error rate of 1.79%, indicating excellent performance, as the MAPE error rate is below 10%. The implication of this research is provides information related to NTP projection that can be used to formulate strategies to strengthen Indonesia's agricultural sector.
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Provinsi Aceh,†Jurnal Agrisep, vol. 21, no. 2, pp. 51–60, 2020.
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June 2020, pp. 342–349, 2020, https://doi.org/10.5220/0008521703420349.
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ASEAN Countries,†Journal of Economics, Business, & Accountancy Ventura, vol. 25, no. 1, p. 123, 2022, https://doi.org/10.
14414/jebav.v25i1.2920.
[13] D. Wulandari, B. S. Narmaditya, P. H. Prayitno, S. Ishak, S. Sahid, and L. A. Qodri, “Nexus between Production Input and
Price Commodity: An Integration Analysis of Rice Barns in East Java of Indonesia*,†Journal of Asian Finance, Economics
and Business, vol. 7, no. 10, pp. 451–459, 2020, https://doi.org/10.13106/jafeb.2020.vol7.no10.451.
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v19i1.511.
[20] H. Juliansyah, Y. Ganesha, I. Ichsan, F. Nailufar, and S. Y. Terfiadi, “Effect of Export Import and Investment on Economic
Growth in Indonesia (Vecm Analysis Method),†Journal of Malikussaleh Public Economics, vol. 5, no. 1, p. 16, 2022, https:
//doi.org/10.29103/jmpe.v5i1.8153.
[21] A. R. Ayinde, B. Celik, and J. Gylych, “Effect of Economic Growth, Industrialization, and Urbanization on Energy Consumption
in Nigeria: A Vector Error Correction Model Analysis,†International Journal of Energy Economics and Policy, vol. 9, no. 5,
pp. 409–418, 2019, https://doi.org/10.32479/ijeep.8175.
[22] E. E. Sumiyati, “Factors Affecting Manufacturing Exports,†Journal of Economics, Business, & Accountancy Ventura, vol. 23,
no. 2, pp. 254–266, 2020, https://doi.org/10.14414/jebav.v23i2.2303.
[23] B. Oryani, Y. Koo, and S. Rezania, “Structural vector autoregressive approach to evaluate the impact of electricity generation
mix on economic growth and CO2 emissions in iran,†Energies, vol. 13, no. 6, 2020, https://doi.org/10.3390/en13164268.
[24] A. Bafada, “Pengaruh Kinerja Ekonomi Makro Terhadap Nilai Tukar Petani,†Quantitative Economics Journal, vol. 3, no. 3,
pp. 162–178, 2020, https://doi.org/10.24114/qej.v3i3.17451.
[25] Salmirah and Priyagus, “Pengaruh nilai tukar petani dan tingkat suku bunga serta pertumbuhan pdrb sektor pertanian terhadap
investasi sektor pertanian di provinsi kalimantan timur,†Jurnal Ilmu Ekonomi Mulawarman (JIEM), vol. 7, no. 4, pp. 1–10,
2022.
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2024-02-21
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How to Cite
[1]
Y. Farida, A. Hamidah, S. K. Sari, and L. Hakim, “Modeling the Farmer Exchange Rate in Indonesia Using the Vector Error Correction Model Method”, MATRIK, vol. 23, no. 2, pp. 309–322, Feb. 2024, doi: 10.30812/matrik.v23i2.3407.
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