ANALISIS PENGARUH INFLASI DAN PENGANGGURAN TERHADAP PERTUMBUHAN EKONOMI INDONESIA

Abstract

This research examines how inflation and unemployment affect Indonesia's economic growth. These two macroeconomic indicators are considered as driving factors for the country's economy, especially developing countries. The purpose of this study is to analyze the relationship between research variables based on the Phillips Curve analysis and Okun's Law. The data used in this study is secondary time series data in the form of quarterly data obtained through CEIC with a research time span of 2000-Q1 to 2021-Q4. Data analysis in this study was based on the Vector Autoregression/Vector Error Correction Model (VAR/VECM) method with a focus on discussing the results of the Impulse Response Function (IRF) and Forecast Error Variation Decomposition (FEVD). The IRF results show that one standard deviation of inflation and unemployment shocks is responded negatively by Indonesia's economic growth in the short term. The FEVD results show that the unemployment variable has the second largest influence on the variability of the economic growth rate of 0.4%. Therefore, policies that prioritize the formation of workforce skills, expansion of employment opportunities, and formation of the labor market must be prioritized