Indonesia and Thailand, two major open economies in Southeast Asia operating under managed-float exchange rate systems, have remained susceptible to both external and domestic shocks since the East-Asian financial crisis of the late 1990s. This paper investigates the transmission of external...

This study analyses inflation, money supply and output growth in Indonesia during 1950-2002. We develop a monetary model of inflation and uses it as a theoretical basis for this study, by the estimation of the cointegration-and error-correction models of inflation