Government Measures Crucial in Balancing Inflation and Unemployment for Growth.
The relationship between inflation and unemployment in Indonesia from 1984 to 2017 shows that unemployment causes inflation, but inflation does not cause unemployment. Government measures play a crucial role in managing this relationship, with varying outcomes. Indonesia can use monetary policy based on sharia principles to address inflation and unemployment effectively. However, the current dual monetary policy prioritizes inflation targets over unemployment, requiring a more balanced approach. To manage both issues, Indonesia needs an eco-friendly business environment with reduced taxes and deregulation. Effective government measures and proportional monetary policy responses are essential in addressing unemployment and inflation together.