The Effect of Inflation and Private Investment on Open Unemployment in North Maluku (Partial Adjudication Model (PAM) Approach)

Abstract

The unemployment problem is very complex and an important issue. It can relate to several indicators. Economic indicators to affect the unemployment level include economic growth, inflation level, private investment and the wages. This study objective is to analyze the effect of private investment and inflation on unemployment level in North Maluku Province. The model is analyzed by stationarity test, cointegration approach, and partial adjustment model (PAM). The results showed that inflation level had a significant and positive effect on unemployment level in North Maluku Province. Private investment had a significant and negative effect on unemployment. Then all research variables (inflation, private investment, and unemployment) had a balance relationship in long run.

Keywords: Inflation, Private Investment, Open Unemployment, Partial Adjustment Models.

DOI: 10.7176/JESD/10-12-07

Publication date:June 30^th 2019