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Inflation is considered as one of the sensitive macroeconomic phenomena in this present economy. This paper is aimed to examine the determinants of inflation in these 10 selected Asian countries namely, Bangladesh, Hong Kong, India, Indonesia, Korea, Malaysia, Philippines, Sri Lanka, Thailand and Vietnam for the period of 2006 until 2015. The results are obtained through panel data fixed effect model regression. Inflation is used as a dependent variable which is measured by consumer price index (CPI) whereas the selected independent variables are interest rate (IR), gross domestic product (GDP), money supply (MS) and public expenditure (PE). The results indicate that IR and MS are significant and negatively related to inflation. However, money supply is found to be the most salient factor to determine inflation rate in these selected Asian countries as 1% increase in money supply will decrease inflation by 2.40% while 1% increase in interest rate reduces inflation by 0.46%.
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In-Text Citation: (Salim et al., 2021)
To Cite this Article: Salim, N. J., Leng, N. K., Yusof, M. H. M., Yahya, H., & Mamat, M. (2021). Determinants of Inflation in Selected Asian Countries. International Journal of Academic Research in Business and Social Sciences, 11(11), 2318–2326.
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