The Threshold Effect of Inflation on Regional Economic Growth in Indonesia
Recent studies state that the relationship between inflation and economic growth is not linear. When inflation exceeds a certain threshold, it will have a negative impact on economic growth. This study aims to investigate the linear and non-linear relationship between inflation and economic growth...
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| Format: | Article |
| Language: | English |
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Bandung: Prodi Manajemen FE Universitas Langlangbuana
2023-12-01
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| Series: | Almana: Jurnal Manajemen dan Bisnis |
| Subjects: | |
| Online Access: | http://journalfeb.unla.ac.id/index.php/almana/article/view/2200 |
| _version_ | 1827198301918724096 |
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| author | Resti Ramadhaniyati Ashari Gunawan Susan Susanti Fadli Agus Triansyah |
| author_facet | Resti Ramadhaniyati Ashari Gunawan Susan Susanti Fadli Agus Triansyah |
| author_sort | Resti Ramadhaniyati |
| collection | DOAJ |
| description |
Recent studies state that the relationship between inflation and economic growth is not linear. When inflation exceeds a certain threshold, it will have a negative impact on economic growth. This study aims to investigate the linear and non-linear relationship between inflation and economic growth in Indonesia using provincial panel data. The linear relationship was tested using a panel regression fixed effect model, while a non-linear relationship was tested using a panel regression threshold fixed effect model. When a linear test is carried out, inflation in Indonesia does not affect economic growth. When conducting a non-linear test, inflation in Indonesia has a positive impact on economic growth only when the value is below 2.11 percent. Meanwhile, when inflation exceeded 2.11 percent, economic growth in Indonesia slowed down. Inflation control policies must still be carried out to reduce the negative effects of inflation because high and fluctuating inflation is not good for the economy.
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| first_indexed | 2024-03-08T17:08:49Z |
| format | Article |
| id | doaj.art-597ffba08d234649947d746c9e8521f1 |
| institution | Directory Open Access Journal |
| issn | 2579-4892 2655-8327 |
| language | English |
| last_indexed | 2025-03-21T10:14:51Z |
| publishDate | 2023-12-01 |
| publisher | Bandung: Prodi Manajemen FE Universitas Langlangbuana |
| record_format | Article |
| series | Almana: Jurnal Manajemen dan Bisnis |
| spelling | doaj.art-597ffba08d234649947d746c9e8521f12024-07-04T04:11:56ZengBandung: Prodi Manajemen FE Universitas LanglangbuanaAlmana: Jurnal Manajemen dan Bisnis2579-48922655-83272023-12-017310.36555/almana.v7i3.22002200The Threshold Effect of Inflation on Regional Economic Growth in IndonesiaResti Ramadhaniyati0Ashari Gunawan1Susan Susanti2Fadli Agus Triansyah3Universitas Pendidikan Indonesia, IndonesiaUniversitas Pendidikan Indonesia, IndonesiaUniversitas Pendidikan Indonesia, IndonesiaUniversitas Pendidikan Indonesia, Indonesia Recent studies state that the relationship between inflation and economic growth is not linear. When inflation exceeds a certain threshold, it will have a negative impact on economic growth. This study aims to investigate the linear and non-linear relationship between inflation and economic growth in Indonesia using provincial panel data. The linear relationship was tested using a panel regression fixed effect model, while a non-linear relationship was tested using a panel regression threshold fixed effect model. When a linear test is carried out, inflation in Indonesia does not affect economic growth. When conducting a non-linear test, inflation in Indonesia has a positive impact on economic growth only when the value is below 2.11 percent. Meanwhile, when inflation exceeded 2.11 percent, economic growth in Indonesia slowed down. Inflation control policies must still be carried out to reduce the negative effects of inflation because high and fluctuating inflation is not good for the economy. http://journalfeb.unla.ac.id/index.php/almana/article/view/2200Economic GrowthInflationThreshold |
| spellingShingle | Resti Ramadhaniyati Ashari Gunawan Susan Susanti Fadli Agus Triansyah The Threshold Effect of Inflation on Regional Economic Growth in Indonesia Almana: Jurnal Manajemen dan Bisnis Economic Growth Inflation Threshold |
| title | The Threshold Effect of Inflation on Regional Economic Growth in Indonesia |
| title_full | The Threshold Effect of Inflation on Regional Economic Growth in Indonesia |
| title_fullStr | The Threshold Effect of Inflation on Regional Economic Growth in Indonesia |
| title_full_unstemmed | The Threshold Effect of Inflation on Regional Economic Growth in Indonesia |
| title_short | The Threshold Effect of Inflation on Regional Economic Growth in Indonesia |
| title_sort | threshold effect of inflation on regional economic growth in indonesia |
| topic | Economic Growth Inflation Threshold |
| url | http://journalfeb.unla.ac.id/index.php/almana/article/view/2200 |
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