ASYMMETRIC IMPACTS OF MONETARY POLICY SHOCK ON OUTPUT GAP: EVIDENCE FROM REGIONS IN INDONESIA

We examine the impact of monetary policy on regional output gaps across 33 Indonesian provinces. Heterogeneous responses gap to shock are captured using Vector Autoregressive model. Moreover, idiosyncratic variations provinces accounted for different observed with spatial econometric The analysis suggests that economic structure and financial depth positively significantly determine aforesaid asymmetric responses. On other hand, size trade openness have a negative them.