Factor affecting the consumer price index in Malaysia / Ramlah Dahlan

The study is determined the relationship of macroeconomic variables with the consumer prices index from the year 1990 to the year 2000 in Malaysia. There are four important macroeconomic variables which is Gross Domestic Product (GDP), Interest Rates and Population that used as the independent variables and the Consumer Prices Index (CPI) as the dependent variables. The main purpose is to look whether the independent variables such as Gross Domestic Product (GDP), Interest Rates and Population are significantly affected the dependent variable which is Consumer Prices Index where it will answered the research question of what are the relationship between all the independent variables and the dependent variable. The data used from secondary data where the data is previously collected by other researcher. All data are collected from The World Bank Database for the year 1990 to the year 2000 on yearly basis. In addition, there are several ways on collecting the information used in the study such as internet and journal from previous researcher. The paper come up with empirical results that all the macroeconomics variables are the key determinants of consumer prices index in Malaysia. The result exhibit that most of the macroeconomics variables have significant relationship with the consumer price index. However there is one variables not significantly related with the consumer price index. Furthermore, the linear regression resulted there was almost no problem on assumption such as serial correlation, autocorrelation, heteroscedasticity and normality occurred. However, there was one multicollinerity error between the consumer price index and the interest rate in Malaysia. Overall, the research shares new knowledge for the use for future researcher and also give guidance related with the factor affecting consumer price index in Malaysia.