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Climate Change and Cyclical Unemployment in Indonesia

Author

Listed:
  • Amanus Khalifah Fil'ardy Yunus

    (Department of Economics, Faculty of Economics and Business, Hasanuddin University, Makassar, Indonesia)

  • Munawwarah S. Mubarak

    (Department of Economics, Faculty of Economics and Business, Hasanuddin University, Makassar, Indonesia)

  • Akbar Mandela Arumattulabala Yunus

    (Department of Economics, Faculty of Economics and Business, Hasanuddin University, Makassar, Indonesia)

Abstract

Cyclical unemployment can transform into a permanent scar in the long term. Meanwhile, climate change is known to be systemic and has a long-term impact. Therefore, this research will investigate the effect of climate change on cyclical unemployment and analyze the potential for hysteresis. In the first stage, we will estimate cyclical unemployment using the Philips curve concept. The data employed is secondary data from Statistics Indonesia, which is processed using the simultaneous equation method. The results show that warming temperatures do not affect cyclical unemployment directly. However, the decrease in economic growth caused by the warming temperature can increase cyclical unemployment. These results also indicate the occurrence of hysteresis in Indonesia.

Suggested Citation

  • Amanus Khalifah Fil'ardy Yunus & Munawwarah S. Mubarak & Akbar Mandela Arumattulabala Yunus, 2024. "Climate Change and Cyclical Unemployment in Indonesia," International Journal of Economics and Financial Issues, Econjournals, vol. 14(5), pages 125-130, September.
    • Handle: RePEc:eco:journ1:2024-05-13
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    More about this item

    Keywords

    Cyclical Unemployment; Inflation; Climate Change; Economic Growth; Hysteresis; Monetary Policy;
    All these keywords.

    JEL classification:

    • E24 - Macroeconomics and Monetary Economics - - Consumption, Saving, Production, Employment, and Investment - - - Employment; Unemployment; Wages; Intergenerational Income Distribution; Aggregate Human Capital; Aggregate Labor Productivity
    • E31 - Macroeconomics and Monetary Economics - - Prices, Business Fluctuations, and Cycles - - - Price Level; Inflation; Deflation
    • E32 - Macroeconomics and Monetary Economics - - Prices, Business Fluctuations, and Cycles - - - Business Fluctuations; Cycles
    • Q54 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Environmental Economics - - - Climate; Natural Disasters and their Management; Global Warming

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