Analysis of the Impact of Inflation on Economic Growth in Indonesia Using Simple Regression Method

Sri Nur Afifah, Amir Machmud, Navik Istikomah and Imas Purnamasari

International Journal of Economics & Business Administration (IJEBA), 2024, vol. XII, issue 4, 99-107

Abstract: Purpose: This study aims to investigate the relationship between inflation and economic growth in Indonesia through a simple regression analysis using SPSS. The results of the regression analysis will provide insights into the nature and significance of the relationship between inflation and economic growth in the Indonesian context. Design/Methodology/Approach: The research objective is to assess the impact of inflation, represented as the independent variable, on economic growth, the dependent variable. The identified research variables include the inflation rate and the Gross Domestic Product (GDP) growth rate. The methodology involves employing a simple regression model in SPSS to analyze historical data spanning the last decade. The samples consist of economic data collected annually from various reliable sources. A purposive sampling method is applied to ensure representation across diverse economic sectors. Findings: The simple linear regression analysis reveals a statistically significant negative coefficient of inflation at -0.250527. This outcome indicates a robust and inverse linear relationship between the inflation rate and economic growth in Indonesia over the past decade. Practical Implications: These findings hold crucial implications for economic policy formulation in Indonesia, emphasizing the urgency of maintaining price stability to support sustainable economic growth. Originality/Value: A strategic focus on inflation control may serve as a catalyst for fostering positive economic growth.

Keywords: Inflation; economic growth; macroeconomics. (search for similar items in EconPapers)
JEL-codes: C21 E31 E32 F43 O47 (search for similar items in EconPapers)
Date: 2024
References: View references in EconPapers View complete reference list from CitEc
Citations:

Downloads: (external link)
https://ijeba.com/journal/863/download (application/pdf)

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:ers:ijebaa:v:xii:y:2024:i:4:p:99-107

Access Statistics for this article

More articles in International Journal of Economics & Business Administration (IJEBA) from International Journal of Economics & Business Administration (IJEBA)
Bibliographic data for series maintained by Marios Agiomavritis ().