<![CDATA[The relationship between inflation and economic growth is not always linear, as the effect of inflation on economic activity may vary across different inflation levels. This study aims to examine the existence of an inverted-U relationship between inflation and economic growth and to determine the turning point across Consumer Price Index (CPI) regions in East Java. The study employs a balanced panel dataset covering eight CPI regions, namely Jember, Banyuwangi, Sumenep, Kediri, Malang, Probolinggo, Madiun, and Surabaya, over the 2016 - 2025 period, resulting in 80 observations. The nonlinear relationship is modeled using a quadratic entity fixed-effects regression, with inflation and squared inflation included as explanatory variables. The characteristics of the nonlinear relationship are examined through the first and second derivatives of the estimated function, while the turning point is calculated analytically using . The uncertainty surrounding the turning-point estimate is evaluated using the Delta Method, Fieller Method, and cluster bootstrap with 3.000 replications. The estimation results show a positive linear inflation coefficient of 2,859727 and a negative quadratic coefficient of - 0,295900, yielding a turning point of 4,832251%. The bootstrap results indicate a median turning point of approximately 4,830925%, with a 95% percentile interval of 4,491083% - 5,678167%. These findings indicate a concave relationship between inflation and economic growth within the fixed-effects specification. This study contributes by integrating quadratic panel modeling, differential calculus, and statistical inference to examine the turning point in the regional context of East Java.]]>
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