The impact of macroeconomic variables towards inflation rate in Malaysia / Amira Nurul Afiqah Abdul Rashid and Nursuhadah Ismail

The aim of this study is to investigate the impact of macroeconomics variables
towards inflation rate in Malaysia. The selected macroeconomic variables or the
independent variables used are government spending, money supply and
unemployment for period from 1982 to 2014, which the total number of observation is
33, while the dependent variable is inflation rate. The relationship is examined by
undertaking regression analysis using time series data that collected from World Bank
Database. Both Single Linear Regression and Multiple Linear Regression are used to
identify the relationship between dependent and independent variables. From the
result, the study shows that government spending and money supply has positive
significant relationship towards inflation meanwhile, unemployment has negative
insignificant relationship towards inflation. This indicates that government spending
and money supply give impacts towards inflation while changes in unemployment
does not give impact to inflation rate in Malaysia. The relationship discovered should
be useful for public, industries and policy makers as well.