THE EFFECT OF EXCHANGE RATE, INFLATION, CAPITAL AND LABOR FORCE ON ECONOMIC GROWTH IN INDONESIA

Goya Kala, Raja Masbar, Sofyan Syahnur

Abstract


Abstract
The study aimed to analyze the influence of exchange rate, Inflation, capital and labor force on economic growth in Indonesia. The data in this study are secondary data sourced from the Central Bureau of Statistics and Bank Indonesia which include data on the rupiah exchange rate against the dollar, inflation, gross domestic fixed capital formation, and labor rate. Analysis of this research based on the Cobb-Douglas Production Function by using the ordinary least square method (OLS) recursively. The results showed that the capital positively affects economic growth. By recursive method, inflation and exchange rate have a significant effect on economic growth. Inflation in particular has a significant negative impact on economic growth through interest rates and capital. However, the amount of labor has no significant effect on economic growth. This means that the government needs to reduce the inflation rate to be able to reduce the interest rate to increase the amount of capital and ultimately increase economic growth in Indonesia.

Keywords


Exchange rate, Inflation, Capital, Labor, Economic growth in Indonesia, Recursively.

Full Text:

PDF

Refbacks

  • There are currently no refbacks.


Creative Commons License
This work is licensed under a Creative Commons Attribution-ShareAlike 4.0 International License.

Managed and Published by:
Economics Development Department
Economics and Business Faculty
Syiah Kuala University
Kopelma Darussalam, Banda Aceh, Indonesia 23111.


ISSN: 2442-7411

E-ISSN: 2549-8355

14162964701485140716

Creative Commons License
This work is licensed under a Creative Commons Attribution-ShareAlike 4.0 International License.
website statistics View My Stats