A MODIFIED MODEL OF THE RELATIONSHIP BETWEEN INFLATION AND UNEMPLOYMENT USING DELAY DIFFERENTIAL EQUATIONS

• Main Author: Sergio, Steven
• Format: Theses
• Language: Indonesia
• Online Access: https://digilib.itb.ac.id/gdl/view/83997
• Institution: Institut Teknologi Bandung

The macroeconomic performance of a country is based on two related macroeconomic components, namely the rate of inflation and unemployment. These two components have a significant relationship because changes in the inflation rate and/or unemployment are able to pose financial risks to society, both during the event and afterward. Therefore, macroeconomic performance and past events are important elements to consider in efforts to mitigate financial uncertainty. The relationship between macroeconomic performance and past events is expressed in an economic model modified by delay differential equations. This model is divided into non-systemic and systemic economic models, each with specific parameters. The estimation of relevant parameters from the model can be used to forecast future inflation rates. By selecting an appropriate delay time, it is hoped that the inflation rate forecasts will help investigate potential financial risks and subsequently prevent financial uncertainty in society in the future.