Inflation, Unemployment, and Economic Growth: Implication on Poverty Level in Bengkulu Province

Abstract

This paper aims to investigate the role of inflation, unemployment, and economic growth in explaining the prevalence of poverty in Bengkulu Province. The study used a time series data for 26 years . The data were secondarily sourced from statistics bureau. Ordinary least square (OLS) was used as an analytical technique. Empirical results show that inflation and unemployment have positive and economic growth has negative impact on poverty. The paper recommends to applied an appropriate macroeconomic policy which is crucial for poverty alleviation. To improve economic growth, efforts must be put in place to increase productivity; improving the level of local production. To restrain the surging rate of unemployment, it is necessary to creates a work training center, opening new economic centers, and linking education and skills needed in the labor market. Furthermore, there must be concrete efforts to controlling inflation, because inflation affects poverty mainly through its impact on real wage. In other word, inflation affects people's purchasing power.

Inflation-poverty causal nexus in sub-Saharan African countries: an asymmetric panel causality approach

“…These research outcomes indicate the need for African countries to design poverty-mitigating approaches, policies and initiatives that have the potency to spur an increase in productivity and aggregate supply in African countries. These findings are consistent with the research outcomes of earlier works such as Danlami et al (2020) and Siyan et al (2016) which established a bidirectional causality between inflation and poverty. Interestingly, there is no evidence of bidirectional symmetric causality between inflation and poverty in the cases of country-specific analysis.…”

“…There is little research that has looked at the causality between inflation and poverty (Danlami et al, 2020;Siyan et al, 2016;Gillani et al, 2009). These few studies used symmetric techniques, which provide limited information and can lead to erroneous conclusions and policy suggestions.…”

“…The few studies on the two-way relationship produce divergent findings. In analysing Nigerian data covering 1980-2014, Siyan et al (2016) used a vector autoregressive (VAR) estimator and found bidirectional causality between inflation and poverty. Danlami et al (2020) also obtained similar findings on Nigeria from 1980 to 2016, using the Toda-Yamamoto causality approach.…”

“…Aside from the theoretical explanations of causality from inflation to poverty, poverty can also drive inflation (Nwadike et al, 2020;Siyan et al, 2016;Danlami et al, 2020). An increase in the economic power (income) of the impoverished in an economy through exogenous factors without a corresponding increase in productivity and aggregate supply could put extra pressure on aggregate demand for goods and services.…”

Análisis de la influencia de la Política Monetaria en materia de Inflación, sobre la Incidencia, Severidad y Brecha de la Pobreza Monetaria y Extrema, 2012-2021.

“…De igual manera, los hallazgos de la presente investigación se asemejan en gran medida a los resultados del trabajo realizado en la provincia de Bengkulu en el año 2020, ya que en este trabajo se determinó que la tasa de inflación tiene un efecto significativo (90% de confianza) sobre la tasa de pobreza para el período 1992-2017. Específicamente, el coeficiente estimado de la variable de inflación fue equivalente a 0.08; por lo que un aumento de 1% en la tasa de inflación conducirá a un incremento de la tasa de pobreza que equivale a 0.08% para la provincia de Bengkulu en Indonesia (Febriani, Yefriza, Ekaputri, Sitorus, & Putri, 2020).…”