UNAIR NEWS Economic fluctuation is one of the main concerns for economists and policymakers in Indonesia.There is nothing certain with economic fluctuation, especially when science and technology are developing rapidly and society is facing an eraof volatility, uncertainty, complexity,andambiguity(VUCA).
It is an excerpt from Prof Dr Rudi Purwono SE MSE’s oration at his inauguration as Professor of the Faculty of Economics and Business (FEB) 51动漫 (UNAIR) on Wednesday, August 31, 2022. Prof. Rudi is 29th professor of FEB UNAIR. In his inauguration, Prof. Rudi delivered an oration entitled “Adaptive Macroeconomic Policy Facing the VUCA Era.”
Volatility
淭he Fed (US central bank, ed) terminated itsQuantitative Easing(QE) policy in 2013. QE is a non-conventional monetary policy of the central bank.The impact is the flight of capital from emerging markets, including Indonesia, explained Prof. Rudi.
Quoting from Basri (2017), Prof. Rudi said that QE then created an increased transaction deficit.The deficit figure was 2.2 percent in 2012, rising to 4.4 percent of the totalGross Domestic Product(GDP) in mid-2013.
淗owever, a few months later, Indonesia has become a ‘beloved’ country for investors.This further shows that the flow of capital in Indonesia is veryvolatile,” added Prof. Rudi.
Uncertainty
There is a lot of uncertainty going on in this era攆or example, the condition of the Covid-19 pandemic before the discovery of a vaccine. In 2020, there was economic uncertainty.
淎t that time, there were many layoffs. Many companies are cutting their employees, increasing the unemployment rate. Economists find it is getting more difficult to predict with economic modeling if they only rely on probability distributions, said Prof. Rudi.
Complexity
Complexityoccurs as a consequence of the rapid flow of globalization.淎s a result of the interconnected and networked environment.The impact is that it is getting more difficult to identify causal relationships between these interactions, said .
On Microeconomics, for example, Prof. Rudi continued from Budiono et al, that the higher the complexity value of a manufacturing company, the more attention should be given to quality strategies to improve performance.
Ambiguity
淣owadays, business decisions are becoming more and more ambiguous. The reason is that there are often more than one solution that might cause a problem, said Prof. Rudi.
It becomes even more ambiguous when there is no analytical process to decide which option to choose. Even when two people perform an evaluation, the results are different and both are valid.
Author: Fauzia Gadis Widyanti
Editor: Feri Fenoria
