Decision Sciences
3 years ago

Inflation, FDI, and Population Growth Impact Unemployment Rate in Malaysia

Enhanced Knowledge in Sciences and Technology
Prediction of Unemployment Rate in Malaysia Based on Macroeconomic Factors
A Khuneswari, P Gopal Pillay, Teo Bi En

Paper Summary

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The researchers studied how different economic factors affect the unemployment rate in Malaysia. They used data from Trading Economics and the Central Bank of Malaysia to analyze variables like GDP growth, inflation, foreign investment, population growth, and exchange rates. By using a method called LASSO regression, they found that inflation rate, foreign investment, population growth, and exchange rate are the main factors influencing unemployment in Malaysia. The best model they created showed that these factors can either increase or decrease unemployment rates in the country. The researchers suggest that government and policymakers should implement fiscal and monetary policies to address unemployment and stabilize the economy.