Media Ekonomi dan Manajemen, Volume 38 Issue 2, July 2023, 343-361 p-ISSN: 0854-1442 (Print) e-ISSN: 2503-4464 (Online) 343 ASYMMETRIC PRICE TRANSMISSION OF SOME BASIC COMMODITIES IN INDONESIA Mahjus Ekananda University of Indonesia, Indonesia Email: mahyusekananda@gmail.com (corresponding author) Abstract The prices of these international goods, world oil prices, exchange rates, and government policies, always influence developments in the current global era that drive domestic commodity prices. This study aims to analyze the effect of asymmetric price transmission on several Indonesian domestic commodities. Asymmetric price transmission occurs if the speed of price adjustment above or below the price trend is not the same. Positive or negative price changes occur if the price is above or below the price trend. Under dynamic conditions, each price will adjust to the long-term price level. This study applies the error correction model (ECM) method to capture the speed of adjustment of each commodity following the long- term price level. This study involves asymmetric price transmission to see price adjustments. Econometric testing through the error correction model is used to determine how much the domestic price adjustments are when there is an increase or decrease in international prices for essential commodities. The results showed an adjustment in domestic prices when global prices increased or decreased for wheat flour, granulated sugar, soybeans, beef, and broiler meat. Based on the coefficient and significance level, there was no domestic price adjustment for rice and broiler chicken eggs. Policy implications include providing input for policymakers in determining prices so that market prices are stable and in line with people's purchasing power. Keywords: Price level; Publicly Goods Price; Commodity; Agriculture JEL Classification: E31, H40, Q11, Q02, Q10 Article History: Submitted: 2023-05-01; Revision: 2023-06-20; Accepted: 2023-06-27; Published: 2023-07-28 Copyright ©2023 Faculty of Economics and Business, Universitas 17 Agustus 1945 Semarang This is an open access article under the CC BY license https://creativecommons.org/licenses/by/4.0 How to Cite: Ekananda, M. (2023). Asymmetric Price Transmission of Some Basic Commodities in Indonesia. Media Ekonomi dan Manajemen, 38(2), 343-361. INTRODUCTION Price transmission in an integrated market occurs when producers can sell their products freely in the domestic or international markets; this is what makes the prices of these products in the domestic or international markets converge over time (Ghoshray, 2010). Domestic produ- cers will decide to sell their goods interna- tionally if the international price is higher than the domestic price; with reduced stocks of these products in the domestic market, the domestic price will increase. This process will continue until domestic prices equal international prices (Ghoshray, 2010). This condition is called symmetrical price transmission (Varela & Taniguchi, 2018). Based on data from the World Bank and the Ministry of Trade of the Republic of Indonesia, it can be seen from several staple food commodities that when the international price of each commodity increases, domestic prices will also grow.