Nexus between Inflation and Unemployment

• 발행기관: 한국유통과학회
• 저자명: Dwi WULANDARI Sugeng Hadi UTOMO Bagus Shandy NARMADITYA Mahirah KAMALUDIN
• 간행물 정보: 『The Journal of Asian Finance, Economics and Business(JAFEB)』Vol. 6 No.2, 269~275쪽, 전체 7쪽
• 주제분류: 경제경영 > 경제학
• 파일형태: PDF
• 발행일자: 2019.04.30

영문 초록

This study intended to examine the relationship between inflation and unemployment rate in Indonesia during 1987 to 2018 period. The study applied a quantitative method using Vector Error Correction Model (VECM) in order to comprehensively understand the causality between inflation and unemployment rates. The data were collected from various main sources including the World Bank, Central Bank of Indonesia, and Central Bureau of Statistics (BPS). The findings showed that inflation has a one-way relationship toward unemployment in Indonesia and it occurs at the third lag. Impulse Response Function (IRF), shows that the inflation rate are fluctuating in response to the shock of unemployment. The unemployment rate responses to shocks from inflation initially increased until it is eventually diminished. It shows that the shocks caused by the impact of inflation were only in the short term. Further, inflation in the three previous lags will have consequences for the unemployment rate in the year. Lastly, both in the long run and short run, unemployment did not affect inflation rates. These findings suggest that high inflation in Indonesia is determined the rising price of basic commodities and fuel. In addition, most companies in Indonesia applying capital intensive so that employment growth in Indonesia is small.

목차

1. Introduction

2. Literature Review

3. Methodology

4. Results and Discussion

5. Conclusion

References

키워드

Unemployment Inflation Phillips Curve Trade off Indonesia