Jurnal Pendidikan Ekonomi Indonesia
Vol 4, No 2 (2022): Jurnal Pendidikan Ekonomi Indonesia. Oktober 2022

Application of Phillips Curve in Indonesia (Long Term And Short Term Approach)

Sulthan Faiz Akbar (Universitas Pendidikan Indonesia)



Article Info

Publish Date
01 Nov 2023

Abstract

Inflation and unemployment are macroeconomic problems experienced by many countries in the world where every policymaker in every country wants these two problems to be addressed together. However, Phillips Curve Theory states that there is a reciprocal relationship between inflation and unemployment so that when economic policymakers implement a policy to increase economic income, these two problems actually have a negative relationship between the two in the short term. This study aims to examine the relationship between inflation and unemployment in Indonesia with a sample of the inflation rate and unemployment rate in Indonesia in 2006-2020 in each semester. On the other hand, this research is carried out based on the Phillips Curve Theory which is relevant in different countries but also this theory is irrelevant in different countries thus causing uncertainty of the study. The research method used is an explanatory quantitative method with documentation techniques obtained from the Central Statistics Agency. The data analysis technique in this study used the Pearson Product Moment Correlation Test method, Granger Causality Test, Cointegration Test, and Error Correction Model. The findings in this study state that inflation and unemployment in Indonesia period have a positive causality relationship between the two where the direction of causality is unemployment to inflation in the long term and based on the results of this study, the Phillips Curve Theory does not apply in Indonesia

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Journal Info

Abbrev

JPEI

Publisher

Subject

Economics, Econometrics & Finance Education

Description

Manuscripts for JPEI should fall within one of the following categories, Research in economics and education, Economic content, Economic instruction, Innovations in pedagogy, hardware, materials, and methods for treating traditional and newer subjects. Reports on the status and events that influence ...