The impact of macroeconomic variables towards standard of living in Malaysia / Nur Azzah Azirah Norariffin

The purpose of this paper is to determine the impact of macroeconomic variables towards
standard of living in Malaysia from year 1976 until 2015. This will involve independent
variables such as population, gross domestic product, taxes, unemployment and household
consumption. Meanwhile, the problem of this study is to identify the relationship
macroeconomic variables on the consumer price index. In addition, the results after regress the
data using Ordinary Least Square (OLS) shows that only gross domestic product and household
consumption has insignificant relationship on consumer price index. Lastly, Granger Causality
test will recognize the variables either has a short run or long run relationship in this study. The
results shows that Maximum-Eigen test have been choose rather than test statistic results
because Max –Eigen is more dominant in the test results. There a short run relationship exist
then proceed using VAR to run the data.