摘要：Introduction Post global financial crises (2008) have forced countries to adopt expansionary and stimulating macroeconomic policies aiming to reduce unemployment. Some countries, such as United Kingdom, Germany, and the United States of America have become successful in lowering the unemployment in their labor markets. However, Spain and Italy are stuck at high rates of unemployment with rigid labor markets (Bhattarai 2016). The unemployment could be stabilized towards their natural rates by stimulating the aggregate demand through fiscal or monetary policies with or without some increase in price levels (Keynes 1936, Phllips 1958, Benati 2015, Blanchard 2016). Short-term economic problems, such as inflation and unemployment are among the most notable macroeconomic problems all the time (Al-zeaud 2014, Arshad 2014, Bhattarai 2016, Caporale and Skare 2011, Cioran 2014, Furuoka 2007, Furuoka 2008, Israel 2015, Katria et al., 2011, Kogid et al. 2011, Mahmood et al. 2013, Okafor et al. 2016, Sa'idu and Muhammad 2015, Stefan and Bratu 2016, Thayaparan 2014, Touny 2013, Umaru and Zubairu 2012, Zaman et al. 2011, Pallis 2006, Benati 2015, Blanchard 2016). The Indonesian government started to focus on inflation when Indonesia experienced an economic shock during the transition period (1965-1969). Fortunately, the Indonesian government managed to control the inflation rate as Indonesia only had an inflation rate of below 10% in 1969 (Bank Indonesia 2004). However, the monetary crisis hit Indonesia again in 1997-1998 that resulted in the inflation rate of 58.4%. During the post-monetary crisis period, Indonesia managed to recover that caused the inflation rate to be below two digits. Further, the global financial crisis hit the global economy in 2008, but the Indonesian inflation rate remained stable. One of the likely factors of this condition is the government' various economic rescue programs such as the tight money or contractive policy that was effective in taming the inflation rate. Besides, the Inflation Targeting Framework that was implemented by Bank Indonesia (the Indonesian central bank) since July 2005 (Bank Indonesia 2017) and the empowerment of the Regional Inflation Monitoring Team in each local region facilitated further the inflation control (Sasongko and Huruta 2018).
