Stable Inflation Rate Research Articles

Dynamics of youth unemployment in ASEAN-5 emerging economies through macroeconomic analysis

This research investigates youth unemployment dynamics in ASEAN-5 emerging economies using a macroeconomic framework. Employing the panel Autoregressive Distributed Lag (ARDL) methodology, it examines the effects of Gross Domestic Product (GDP), inflation rate, population growth and Foreign Direct Investment (FDI) on youth unemployment rates. Empirical results reveal that GDP and inflation significantly influence youth unemployment over the long term. This highlights the interplay between economic expansion and youth employment prospects. Conversely, neither population growth nor FDI significantly impacts youth unemployment. This suggests that increasing population or attracting foreign investments alone may not directly translate to better employment opportunities for the youth. Instead, robust economic growth and stable inflation rates are crucial. These findings underscore the need for ASEAN-5 policymakers to develop strategies fostering economic growth and controlling inflation to mitigate its adverse effects on youth employment. The research provides insights into how targeted economic policies can better address youth unemployment challenges, creating a conducive environment for job creation and economic stability, ultimately benefiting the youth workforce.

Foreign Direct Investment In Indonesia: Economic Growth IKN

IKN is expected to become a sustainable city that will drive the country's economy in Indonesia in the future. This research analyses the correlation amidst foreign direct investment, inflation, and environmental degradation with economic growth in IKN. Therefore, this study aims to examine all variables that affect the economic growth of IKN. Thus, this study provides implications for regulators and policymakers on how to optimize IKN's economic growth in a sustainable manner. This analysis utilizes time series data collected from 38 provinces in Indonesia from 2018 to 2022. Secondary data obtained from the websites of the World Bank, BPS, and OECD is utilized in this study. Data testing uses a data panel regression analysis model with Eviews 10 software. The results of this study indicate that Foreign Direct Investment and inflation have a significant positive effect on economic development. Conversely, the environmental degradation has a significant negative impact on economic growth. The findings of this study confirm that economic growth can be enhanced through increasing FDI inflows, maintaining a stable inflation rate, and environmental degradation at a certain level, which can stimulate economic growth. Therefore, all variables in this study contribute to economic growth.

Growth volatility in the inflation-targeting regime: Evidence from Indonesia

<abstract> <p>Low and stable inflation and exchange rates are the main objectives of inflation-targeting monetary policy. The internal and external stabilities are prerequisites for promoting economic growth. Using a two-stage GARCH, we investigated the effect of inflation instability and exchange rate unpredictability on the economic growth uncertainty in the case of Indonesia over the period 2000(1)– 2022(12). It was evident that both inflation instability and exchange rate unpredictability hurt output growth. The impact of inflation instability was higher than that of exchange rate unpredictability. While the output growth was higher in the post inflation-targeting regime adoption, the effect of real exchange rate instability was greater than that of nominal exchange rate unpredictability. Those findings suggested that the monetary authority should strengthen their commitment to achieve the inflation target range. The sharper focus on the inflation stability might avoid the monetary authority conducting twofold targets of inflation and exchange rate stability to stimulate economic growth.</p> </abstract>

Perceived inflation in the Vietnamese economy: New points in methodology and applications

Researching and developing methods to measure perceived inflation is an indispensable requirement for the monetary policy management of the State Bank of Vietnam, especially in the context of interest rate amplitudes. remains at the lowest level in history in Vietnam. This study was conducted in that context with the goal of developing a tool to measure perceived inflation based on a solid methodological foundation. The result is the creation of a new measure, integrating the psychological 'gain-loss' effect of consumers on price fluctuations. In particular, the final product is an integrated website, allowing automation of the research and analysis process. The results of the study provide evidence of overstated consumer inflation perceptions during periods of economic volatility, when perceived inflation is significantly higher than the headline inflation (CPI). These findings not only have academic value but are also important in supporting the State Bank of Vietnam in evaluating and operating monetary policy, especially in identifying and dealing with fluctuations in perceived inflation in the economy. From the results of this study, we call for participation and suggestions from the experts, with the aim of minimizing the undesirable effects of inflation and supporting the maintenance of a stable inflation rate, contributing to Vietnam’s economic growth in 2024.

Determinants of NEPSE Index: Insights from ARDL Modeling

Background: The stock market, acting as an economic barometer, crucially influences a nation's development by gauging its financial stability. In contrast, sustainable stock market indices have become vital in assessing listed companies' long-term viability and ESG performance.
 Objectives: The research aims to uncover the influence of various macroeconomic factors (GDP growth, inflation, broad money supply) and bank-specific indicators (bank stability, funding risk, interest rate) on the NEPSE index.
 Methods: This study delves into the determinants shaping the NEPSE index in Nepal, utilizing the autoregressive distributed lag (ARDL) model with annual time series data spanning from 1995 to 2022. The NEPSE index, as a measure of sustainable stock market performance, becomes crucial in understanding market dynamics. This study analyzes the impact of GDP growth, inflation, broad money supply (M2), and bank-specific indicators on the NEPSE index.
 Results: The study found that the NEPSE index is positively influenced by GDP growth, broad money supply (M2), and bank stability (BSTAB). Policymakers are urged to focus on fostering GDP growth, implementing effective monetary policies, and enforcing robust banking regulations to create a conducive market atmosphere, thereby inspiring investor trust. Conversely, the study demonstrates that inflation and funding risk (FRISK) exert a negative and significant impact on the NEPSE index. Hence, policymakers and central banks are advised to closely monitor and manage these variables to ensure stability and investor confidence, thereby nurturing a healthy stock market environment.
 Conclusion: There is a long-term equilibrium relationship between selected variables and the NEPSE index. Macroeconomic policies and bank-specific quality play an important role in the sustainable NEPSE index.
 Implications: The outcomes of this research underscore the importance of maintaining stable inflation rates and effectively managing funding risks and interest rates. By doing so, regulators can facilitate a stable and conducive environment for stock market investments, encouraging economic growth and investor participation. These insights are invaluable for shaping effective policies and regulations, promoting a vibrant stock market, and fostering economic stability in Nepal.

The Effect of Real Interest Rate on Real Economic Growth in Jordan

Objectives: This study aims to investigate the effect of the real interest rate on economic growth in Jordan, using annual data for the period from 1990 to 2019.
 Methods: To achieve the study's objectives, both the descriptive and analytical curriculum was used using the Autoregressive Distributed Lag (ARDL) method.
 Results: The study revealed that there is a statistically significant negative effect of the real interest rate on economic growth in Jordan, as when the real interest rate increases by (1%), the real economic growth decreases by (0.97%), and there is a statistically significant negative effect of the inflation rate on economic growth in Jordan, as when the inflation rate increases by (1%), the real economic growth decreases by (0.85%). In addition, there is a statistically significant exponential impact of the money supply on Jordan's economic growth, as when the growth in the money supply increases by (1%), real economic growth increases by (0.49%).
 Conclusions: The study recommended that an expansionary monetary policy should be pursued to increase market liquidity. It also recommended reducing loan interest rates to improve and create an investment environment to attract investment and revive the economy, thereby driving economic growth with the fiscal policy's work to maintain stable inflation rates.

Pengaruh Reksadana Syariah, Saham Syariah, dan Inflasi terhadap Pertumbuhan Ekonomi Indonesia Tahun 2013-2022

The process of economic growth becomes an influence on people's welfare, and is also a benchmark for each country to see the growth and development of the country's economy in the long term. There are several factors that can affect the process of economic growth in Indonesia such as inflation and investment. Investment can encourage people to manage funds and provide income for the state. While good economic growth is having a stable inflation rate and increased investment. So that this study aims to examine how much influence Islamic mutual funds, Islamic stocks, and inflation have on Indonesia's economic growth in 2013-2022. As for this research, secondary data was collected through official websites, such as the Financial Services Authority (OJK) website for sharia mutual funds and sharia stocks, as well as the Central Bureau of Statistics (BPS) website for Indonesia's GDP economic growth and inflation. The population in this study are reports on Islamic mutual funds, Islamic stocks, inflation, and economic growth registered in 2013-2022. While the sample in this study used purposive sampling, which was taken from the entire quarter. To test the data used in this study, namely the multiple linear regression test, then the partial test (t test), simultaneous test (f test), and test the coefficient of determination (R2). Furthermore, from the results of the research conducted, it is known that partially Islamic mutual funds and Islamic stocks have a significant effect on economic growth, while partially inflation has no significant effect on economic growth. While simultaneously having a significant effect on Indonesia's economic growth.

Investigations into Ghana’s Macroeconomics Relationship between Inflation and Unemployment. Quantitative Analysis Based on Time Series in the Years 1990-2014.

Indicators of a country's economic well-being include the unemployment rate and inflation rates. The empirical relationship between inflation and unemployment in Ghana's economy is explained and analyzed in this paper. It appears that the most hotly debated statistics in Ghana are the rate of inflation and the rate of unemployment, yet there is lack of knowledge about the connection between unemployment and inflation, it is imperative that we gain this understanding. In addition, the tax rate, compensation for employees, participation in the labor force, and enrolment in tertiary education are all indicators of unemployment. A quantitative framework is used to explain the empirical relationship between inflation and unemployment in Ghana and determine the sensitivity of unemployment to changing inflation levels using co-integration regression, causality, correlation, and sensitivity analyses. The Augmented Dickey-Fuller test of stationarity was adopted, after which the Granger causality method was used to determine causation between inflation and unemployment The study relied on World Bank data from 1990 to 2014 and found a strong correlation between unemployment and inflation in the Ghanaian economy which is also consistent with Haug and King (2011), whereas Onwioduokit (2006) found a negative correlation. The model's variables are stationary, and the findings of the causality test point to a link between Ghana's high unemployment rate and its high inflation rate. The unemployment will rise by 3.2795 percent if inflation rises by 1 percent. I therefore recommend that the Ghanaian economy maintain a low and stable inflation rate in order to reduce unemployment, equivocally, thanks to the findings of this research. There is evidence to suggest that inflation has a long-term positive impact on and is a direct cause of unemployment in Ghana, so policymakers and the government should put more effort into keeping inflation low in order to address this problem. Since inflation levels can be used to measure unemployment levels to some extent and the R-squared is significantly low in the regression result, the measurement of inflation should be done more accurately to avoid errors. Ghana's Statistical Service must devote more resources to ensuring that the CPI basket includes only relevant items and should be given the appropriate weights. Real-world impact should be reported in relation to other indicators or factors to make it more comprehensible. For example, an increase in unemployment of z percentage points could be explained by an increase in the price of an item purchased on the market rising by y percentage points. Finally, the researcher recommends that other economic indicators, such as employee compensation, tax rate, labor force participation rate, and tertiary school enrollment, be taken into consideration as potential indicators of unemployment in African economies.

Nexus Among Innovations, Financial Development and Economic Growth in Developing Countries

Studying the level of economic growth remains a topic of discussion among economists and policymakers. As economic growth further impacts the socioeconomic development of the country. The present study has investigated the impact of innovations and financial development on economic growth in case 58 developing counties from 2000 to 2020. To analyze the stationarity of the variables LLC, ADF-Fisher, IPS, and PP-Fisher unit roots have been used. This study uses a panel autoregressive distribution lag co-integration approach and a vector error-correction model for short-run dynamics of the model. For investigating the causal relationship among the variable’s variance decomposition and impulse response function have been applied. The outcomes of the study show that innovations, availability of physical capital, and trade have a positive and significant impact on economic growth. Financial development has significant but inverse influence on economic growth. It is suggested that for higher economic growth, developing countries improve the threshold level of financial development and use an innovative process of production. Urbanization and inflation hurt economic growth. Thus, developing countries should promote a stable inflation rate with liberalised trade, innovation, and physical capital to enhance economic growth.Copyright© 2022 The Author(s). This article is distributed under the terms of the license CC-BY 4.0., which permits any further distribution in any medium, provided the original work is properly cited.

PENGARUH JUMLAH UANG BEREDAR, SUKU BUNGA DAN NILAI TUKAR TERHADAP TINGKAT INFLASI DI INDONESIA MENGGUNAKAN PENDEKATAN ANALISIS JALUR PERIODE 2010Q1 – 2020Q4

Monetary policy is one of the important components in an economic system whose conditions are always uncertain. One of the most important objectives of monetary policy is to maintain price stability for goods and services. Price volatility, which is manifested as inflation, can have a bad long-term impact on the national economy if it is not controlled properly. Therefore, it is important to control inflation to maintain a healthy economic climate. A low and stable inflation rate is important for long-term economic growth. Monetary policy instruments that can maintain price stability include the money supply, interest rates and exchange rates. Therefore, this study aims to analyze the effect of JUB, interest rates and exchange rates on the inflation rate through path analysis method. Path analysis method is used to see the direct and indirect effect of the money supply on inflation through interest rates and exchange rates as intervening variables. The results showed that the money supply and exchange rate directly did not have a significant effect on the inflation rate. Meanwhile, interest rates have a significant direct effect on inflation. Indirectly, only interest rates have a role in mediating the relationship between the money supply and the inflation rate. Keywords: monetary policy; inflation; money supply; interest rate; exchange rate; path analysis

Does Economic Growth Mediate Investment, Inflation, and Human Development Investment on Poverty in Indonesia?

Poverty is a classic yet interesting topic of discussion because the problem of poverty has not been solved. This study analyzed the role of economic growth in mediating the effects of investment, inflation, and Human Development Investment (HDI) on poverty in Indonesia. Using the multiple regression method of path analysis and the data from 32 provinces in Indonesia, the results showed that investment had a positive effect on economic growth and poverty, but inflation had no effect on economic growth and poverty while HDI had a positive effect on economic growth but a negative effect on poverty. Economic growth mediated the effect of investment and HDI, but not the effect of inflation on poverty. Hence, it can be said that it is not enough for the government to only prioritize economic growth, optimal investment, a higher level of HDI, and a stable inflation rate. They must also strive to reduce inequality between regions, support labour-intensive, well-targeted and direct investments in the real sector, and involve all stakeholders to achieve an effective and efficient national development in the context of poverty reduction.How to Cite:Fitriady, A., Silvia, V., & Suriani. (2022). Does Economic Growth Mediate Investment, Inflation, and Human Development Investment on Poverty in Indonesia? Signifikan: Jurnal Ilmu Ekonomi, 11(2), 437-456. https://doi.org/10.15408/sjie.v11i2.26145.JEL Classification: C33, E22, O11

Investigating the Relationship between Inflation and Economic Growth: A Case of Pakistan

We re-evaluate empirically the relationship in inflation, and economic growth for Pakistan over the period of 1985 to 2019. Using the Autoregressive Distributive Lag (ARDL) method, this study used the Wald and F-Bound test to find out long-term relationships between these variables and investigate the effect of Inflation over Pakistan economic growth and trade. Our result indicates inflation is negatively affecting economic growth and terms of trade in long run. The results showed that a moderate level of inflation is beneficial for growth and trade while high level or double-digit figure inflation harmful for Pakistan economy. According to the results of the study, inflation is away from its equilibrium value. Error correction term”- 0.16” reveals that 16 percent adjustment has been occurred during the year in the short run-in economic growth. This study also shows that inflation and Terms of trade volatility in Pakistan has negative relation. When Inflation increases terms of trade decreases and vice versa. It reveals that a low and stable rate of inflation boost the trade which leads to prosperity of the countrymen while high rate of inflation is detrimental for economic growth and Trade.

REFINANCING RATE AND ITS IMPACT ON THE COUNTRY'S ECONOMY IN THE CONTEXT OF THE COVID PANDEMIC

REFINANCING RATE AND ITS IMPACT ON THE COUNTRY'S ECONOMY IN THE CONTEXT OF THE COVID PANDEMIC

Estimation of Inflation Threshold of Indonesia and Its Effect on Economic Growth Periode 1981-2019

Sustainable economic growth with a low and stable inflation rate is one of the goals of macroeconomic policy in improving people's welfare. High inflation can be detrimental to economic growth in the medium and long term, while a certain level of inflation is needed to move the economy. Therefore, the question arises about the level of inflation that does not have a negative impact on economic growth. This study aims to estimate the inflation threshold level and identify its effect on Indonesia's economic growth 1981-2019. The research begins by determining the best model among the models that regress inflation on economic growth with quadratic regression, Hansen's (2000) threshold regression, and Mubarik's (2005) threshold regression (2005). The best model is the Mubarik threshold regression model (2005) with an inflation threshold of 6.85 percent. Mubarik's (2005) threshold regression analysis was reused in the model involving the FDI variable, the inflation threshold was 7.11 percent, and FDI had a positive effect. Inflation below the inflation threshold encourages economic growth, while inflation above the inflation threshold is detrimental to economic growth. The result of the estimated threshold level is higher than the inflation target by BI, so that inflation targeting can be increased.

Nominalne i realne zarade u Republici Srbiji 2001-2020

The aim of this paper is to present, decompose and analyze time series of average gross and net nominal and real wages in the Republic of Serbia. The paper presents monthly time series of wages for the period from January 2001 to December 2020. Time time series of wages are seasonally adjusted using the software JDemetra +, ver. 2.1.0 and the X13-ARIMA program. Real gross and net wages were obtained by dividing the series of nominal average gross and net wages by the retail price index (until January 2009) and then by the consumer price index (since January 2009). It has been noticed that there are three periods in the movement of time series of wages. In the period before the Global Financial and Economic Crisis (2000-2008), nominal and real wages recorded a strong upward trend. In the post-crisis period, from 2009 to 2017, there was a slowdown in wage growth. In that period, nominal wages were rising, and as a consequence of inflation, real wages stagnated. In the third period, from 2018-2020, due to wage growth in the public sector and low and stable inflation rates, both nominal and real wages have been growing. The beginning of each of these three periods coincides with changes in the methodology of calculating the average wage, which affected the appearance and variability of time series of wages, and especially the seasonal component in the series.

СТАН І ПЕРСПЕКТИВИ РОЗВИТКУ ГРОШОВО-КРЕДИТНОГО РИНКУ УКРАЇНИ

The article is devoted to the analysis of the state of the money market of Ukraine and the prospects for its development. A necessary condition for ensuring the stable economic development of Ukraine is to ensure the stability of the national monetary unit. The stages of formation and the current state of the banking sector of Ukraine are characterized. However, the introduction of quarantine restrictions (Covid-19) led to a sharp decline in economic activity in the world and in Ukraine. It is predicted that economic growth will resume after the 2020 recession thanks to the adopted monetary and fiscal measures. But compared to the crisis of 2007-2009, the influence of monetary instruments is limited. It was highlighted that quantitative easing programs are the main tool of monetary policy. The priority goals of the monetary policy have been singled out, namely, the main one remains the support of price stability in the state, the promotion of financial stability (including the stability of the banking system). It is noted that price stability consists in preserving the purchasing power of the national currency by maintaining low, stable inflation rates in the medium term. The main indicators of banks' activity over the past five years have been analyzed. Since the beginning of the war in February 2022, it has been singled out that banks with domestic capital continue their work without changes, and two banks with foreign capital have ceased their activities (do not have a banking license). Aggregate information on the banking system of Ukraine as a whole is presented (total indicators for all Ukrainian commercial banks, including those that are state-owned). The dynamics of changes in total liabilities of Ukrainian commercial banks are analyzed. The analysis of the dynamics of the main indicators and tools of the money market, the main problems of its development, and ways of solving them are presented. The trends of its development and policy are identified and the proposals for solving the problems of the efficiency of the money market in Ukraine are substantiated.

Inflation targeting policy as a framework for managing monetary policy in Sudaneconometrics study during the period (1980-2018) With reference to the experiences of some leading countries: سياسة استهداف التضخم كإطار لإدارة السياسة النقدية في السودان – دراسة قياسية خلال الفترة (1980 – 2018)- مع الإشارة إلى تجارب بعض الدول الرائدة

Targeting inflation is ultimate goal of monetary policy as this policy is expected to control inflation and maintain economic growth. The experiences of developing countries have shown that the inflation targeting mechanism is an effective system for managing monetary policy in its endeavor to achieve general price stability Studies on Sudan have shown that structural economic imbalances, underdevelopment of the financial and banking sector, and poor coordination between monetary and fisical policies remain an obstacle to developing a framework for targeting inflation. maintaining a low and stable rate of inflation in the long term. The study assumed that government spending is not an independent policy tool to control inflation, and there is an inverse relationship between GDP and inflation. The study findings show the existence of two cointegration vectors for inflation and its determinants, and the insignificance of the money supply and government spending. The study recommended not adopting expansionary monetary policies reducing government spending, especially current spending, and improving the exchange rate in the country by subsidizing and diversifying its production to increase GDP and encourage exports.

Does renewable energy use enhance exchange rate appreciation and stable rate of inflation?

The current study is aimed at investigating the relationship between the use of renewable energy, the rate of currency exchange, and the rate of inflation with the ARDL model. The findings of the ECM show that in the long run, a bidirectional association between exchange rate and renewable energy exists in Brazil. This shows that the rate of currency exchange affects the use of renewable energy, and the use of renewable energy affects the rate of currency exchange. The inflation rate also affects renewable energy and exchange rate in the long run. The rate of adjustment to equilibrium is also below 50%, indicating that it will take a long time to adjust to long-run equilibrium. In the short run, we ascertain that renewable energy use has a significant negative effect on the rate of currency exchange, showing that a rise in the use of renewable energy significantly causes the exchange rate to appreciate. The long-run results show that renewable energy use negatively impacts exchange rate (appreciation), while the inflation rate and rate of currency exchange significantly affect the use of renewable energy positively. Thus, in addition to lowering carbon dioxide emissions and global warming effects, renewable energy use also facilitates an improvement in the currency's value. Therefore, the use of renewable energy should be promoted, and nations should shift to the use of renewable energy. This will also promote zero carbon in the future.

Monetary policy rules: An approach based on the theory of chaos control

This article explores the relationship between Taylor rules for monetary policy and those derived from chaos control methods. A similar structure of both rule types would theoretically support the stabilizing role of the Taylor rule for the control of inflation, which until now has been based on an empirical framework. This link between monetary policy and chaos control rules is illustrated using the OGY method of chaos control, resulting in a control rule that is applied to a monetary model that presents chaotic solutions and becomes stable at an objective equilibrium point with a stable inflation rate.

PENGARUH INFLASI DAN INVESTASI TERHADAP TINGKAT PENGANGGURAN TERBUKA DI INDONESIA PERIODE 2002-2019

Open Unemployment is a labor force that truly does not have a job. This study was conducted aiming to examine the effect of inflation and investment on open unemployment in Indonesia from 2002 to 2019. The data used are time series data. The analysis technique used in this study is the classical assumption testing, hypothesis testing and multiple regression analysis. The analysis shows that partially positive and significant effect on open unemployment means that the higher the inflation, the higher the open unemployment will be, and vice versa. Investment is partially negative and significant effect on open unemployment means that the higher the investment, the open unemployment will decrease, and vice versa. And inflation and investment simultaneously have a significant effect on open unemployment. The results can be expected to provide input to the government so that it can maintain a stable inflation and investment rate so that the level of open unemployment can remain stable.Keywords: Inflation, Investment, and Open Unemployment.