Causality Analysis Of Economic Growth, Inflation And Employment In West Sumatera

Sconda Novriadi () and Hasdi Aimon
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Sconda Novriadi: Universitas Negeri Padang
Hasdi Aimon: Universitas Negeri Padang

A chapter in Proceedings of the 10th Padang International Conference on Education, Economics, Business and Accounting (PICEEBA-10 2022), 2025, pp 225-235 from Springer

Abstract: Abstract This study aims to examine and assess the causal relationships among economic growth, inflation, and employment in West Sumatra. The research adopts an associative and descriptive approach, employing secondary Time Series data covering the period from the first semester of 2000 to the second semester of 2021 in West Sumatra. Utilizing Vector Auto Regression (VAR) as the analytical method, the study investigates the variables of economic growth, inflation, and employment. The findings are as follows: (1) The Granger causality test reveals a one-way causal relationship between inflation and economic growth, where inflation influences economic growth, but economic growth does not impact inflation in West Sumatra. (2) The Granger causality test also indicates that there is no causal relationship, whether one-way or two-way, between inflation and employment opportunities. This is demonstrated by the lack of influence of inflation on employment, and vice versa, in West Sumatra. (3) Lastly, the Granger causality test confirms a two-way causal relationship between economic growth and employment opportunities. Economic growth influences employment opportunities, while employment opportunities also affect economic growth in West Sumatra.

Keywords: Economic Growth; Inflation; Employment; VAR (search for similar items in EconPapers)
Date: 2025
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Persistent link: https://EconPapers.repec.org/RePEc:spr:advbcp:978-94-6463-839-4_20

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DOI: 10.2991/978-94-6463-839-4_20

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