Determining the Phillips Curve and Okun's Law in Indonesia

This research aims to analyze the direct effect of inflation on growth, the direct effect of inflation on unemployment, the direct impact of economic growth on unemployment, and the indirect effect of inflation on unemployment through economic growth as an intervening variable. The analysis uses data from 34 provinces in Indonesia spanning the period from 2014 to 2022, utilizing Eviews for statistical processing. The Fixed Effects Model (FEM) was selected for Model 1, while the Random Effects Model (REM) was chosen for Model 2. This research found that inflation has a direct positive and significant effect on economic growth, inflation has a direct positive and significant impact on economic growth, economic growth has a direct negative and significant effect on unemployment, and indirectly, inflation has a negative and significant impact on unemployment when mediated by economic growth. The effect of inflation on unemployment, both directly and indirectly, follows the Phillips Curve, and the impact of economic growth on unemployment follows Okun's Law.本研究旨在剖析通货膨胀对经济增长的直接效应、通货膨胀对失业率的直接效应、经济增长对失业率的直接效应，以及以经济增长为中介变量时，通货膨胀通过经济增长对失业率产生的间接效应。本分析采用印度尼西亚34个省份2014至2022年的面板数据，借助Eviews软件开展统计处理。模型1选取固定效应模型（Fixed Effects Model, FEM），模型2选取随机效应模型（Random Effects Model, REM）。本研究发现，通货膨胀对经济增长具有显著正向直接影响，经济增长对失业率具有显著负向直接影响；间接而言，以经济增长为中介渠道时，通货膨胀对失业率存在显著负向影响。无论直接还是间接路径下，通货膨胀对失业率的影响均符合菲利普斯曲线（Phillips Curve），经济增长对失业率的影响则符合奥肯定律（Okun's Law）。