Research Paper
Year: 2019 | Month: May | Volume: 6 | Issue: 5 | Pages: 40-55
An Analysis on the Existence of Phillips Curve Theory in the Economy of North Sumatera in the Period of 2004-2015
Elmarthin Pramasastrawan Zai1, Murni Daulay 2, Rujiman2
1Posgraduate Students Faculty of Economy & Business at University of North Sumatera, Indonesia
2Postgraduate Lecturer Faculty of Economy & Business at University of North Sumatera, Indonesia
Corresponding Author: Elmarthin Pramasastrawan Zai
ABSTRACT
The objective of the research was to analyze whether Phillips Curve Theory is valid or not concerning inflation and unemployment in North Sumatera. The research used panel regression analysis, using E-views 7 software program. The population was North Sumatera Province and four inflation towns – Medan, Pematangsiantar, Padangsidimpuan, and Sibolga in the research period of 2004-2015. The result of the research showed that the variable of inflation had positive and significant influence on unemployment rate. It indicated that the increase in inflation would cause the increase in the employment rate in North Sumatera so that it could be assumed that Phillips Curve theory could not describe the correlation between inflation and unemployment in North Sumatera.
Key words: Inflation, Unemployment, Phillips Curve, North Sumatera
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