The Influence of Inflation and Unemployment on Consumption Levels in Indonesia

Abstract

This study aims to determine the relationship and interaction of the influence of inflation variables, and interest rates on national income. This research was conducted in the context of international trade using time series data covering a period of 36 years, starting from 1986 to 2021. Indonesia was chosen as the object of research. This data is obtained from official sources such as the World Bank. The data is then processed to obtain test results with the ARDL (Autoregressive Distributed Lag) method. The method used is ARDL (Autoregressive Distributed Lag). Based on the results of the analysis, it can be concluded that the variables of national income, inflation, and interest rates affect each other in the long run. Within the framework of the analysis that has been done. This study provides insight into the dynamics of the Indonesian economy and its relevance in the global context. However, it should be noted that these results may differ depending on the method of analysis and the time period chosen.