Abstract
Inflation in Indonesia, in general, can be caused by a combination of various factors, both in terms of demand, supply, and expectations. The contribution of each element that influences inflation is not always the same from time to time. Gordon (1997) explains the determinants of inflation from these three sides, namely demand, supply, and expectations. The importance of expectations in influencing increase was also stated earlier by Chopra (1985). In this study, spatial Durbin for panel data with fixed effects in modeling inflation in the West Java province. The results show that Minimum Work Wage, percentage of poor population, Gross Regional Domestic Product (GRDP), spatial lag of poor population, and spatial lag of GRDP have a significant influence on the Durbins panel spatial model. There is an adjacent regional effect on inflation in the West Java province based on the value of the lambda obtained. Based on the criteria R-square of 94.29%, it can be concluded that the SDM panel data model has an excellent performance in explaining the diversity of data. The AIC and BIC criteria also show that the SDM panel data model well applied in modeling Regency/City inflation in West Java province.
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