<![CDATA[This study aims to determine the impact of Crude Palm Oil (CPO) price shocks in the world market on the export value of CPO and economic growth, inflation rate, exchange rate, and money supply as proxy of economy of Indonesia during 2001-2013. Based on quarterly time series data and using Vector Autoregression (VAR) model with Impulse Response Function(IRF) dan Variance Decomposition (VD), the studytries to analyzethe effects of CPO priceshocks to export value ofCPO commodity andeconomy ofIndonesia.The results show several conclusions: (i) the CPO price shocks in the world market have a positive impact on export value of CPO for 15 months; (ii) it also have a positive impact on economic growth for 15 months; (iii) it pushes up the domestic inflation rate for a year; (iv) it increases the domestic money supply which lasts for 6 months; (iv) it negatively affects the real exchange rate of Rupiah for 10 months.Therefore, government and all stakeholders should make a great collaboration to eliminate the negative effect of CPO price shocks. In addition, government expected to continue to realize the optimal infrastructure for palm oil industry. Because of inadequate of infrastructure can causerisingoftransportation costs andlackingofcompetitiveness ofCPOof Indonesia.]]>
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