Analyzing The Impact Of Inflation And Unemployment On Indonesia's Economic Growth

Abstract

This paper uses secondary data from BPS and BI from 1995 to 2004 to examine how inflation and unemployment affect economic growth in Indonesia. This period was chosen because it is a period full of dynamics and challenges of the Indonesian economy, such as monetary and economic crises, political reforms, trade wars and terrorism global, as well as changes in the structure of the economy. This article uses correlation and multiple regression analysis methods using the Spreadsheet program. It is hypothesized that unemployment and inflation have a detrimental impact on Indonesia's economic growth. This article elucidates the relationship among inflation, unemployment, and economic growth, also delving into the Phillips Curve hypothesis. The analysis demonstrates that there is no application of the Philips curve in Indonesia, with unemployment and inflation having a modest negative association. This can be caused by several factors, including the structure of the Indonesian economy, monetary and fiscal policies, and external factors. To enhance economic growth, reduce inflation, and decrease unemployment in Indonesia, the government and future researchers can find valuable recommendations and guidance in this article.