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All Journal Convergence : The Journal of Economic Development Jurnal Pengabdian Masyarakat Multidisiplin Journal of Research in Social Science and Humanities East Asian Journal of Multidisciplinary Research (EAJMR) YASIN: Jurnal Pendidikan dan Sosial Budaya
Purmini, Purmini
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Journal : Journal of Research in Social Science and Humanities

 1 
The Effect of Inflation, Provincial Minimum Wage (UMP) and GRDP on Trade Balance in Java Island Wandira, Trisna; Purmini, Purmini
Journal of Research in Social Science and Humanities Vol 4, No 2 (2024)
Publisher : Utan Kayu Publishing

Show Abstract | Download Original | Original Source | Check in Google Scholar | DOI: 10.47679/jrssh.v4i2.225

Abstract

This research studies the effect of inflation, UMP, and GRDP on the trade balance of Java Island by considering the complexity of the relationship between these variables. The methodology used is multiple linear regression analysis with secondary data from the Central Bureau of Statistics and the Ministry of Trade for the period 2017-2023. The Common Effect Model (CEM) is used, and the results of the analysis show that the independent variables can explain 72.28% of the variation in the trade balance. The results show that inflation has a significant negative effect on the trade balance, where an increase in inflation can reduce the competitiveness of domestic products. UMP also has a significant and negative effect, where an increase in UMP may increase purchasing power but also production costs, potentially reducing competitiveness. In contrast, GRDP shows a significant positive effect, where economic growth can increase export volume despite the risk of increasing imports. This study recommends the need for effective economic policies to control inflation and adjust UMP to suit local economic conditions, in order to improve Indonesia's trade balance performance.
Co-Authors Agoes Hermanto, Bambang Armelly, Armelly Azhar, Arry Ptriasurya Febriani, Ratu Eva Prakoso, Radhityo Adhi Wandira, Trisna Yenni Yenni