The Mediating Effect of Inflation on the Effect of Tradeliberalization and Government Spending towards Welfare
The Mediating Effect of Inflation on the Effect of Tradeliberalization and Government Spending towards Welfare

Summary/Abstract: The purpose of this study is to find the effect of trade liberalization and government spending on welfare, both directly and indirectly, through the mediation of the inflation rate. The research method used in this research is the Library Research, as a form of research that utilizes the available literature in the form of books, journals, data and other empirical studies. These materials can be obtained from the library directly or Internet. The data used in this research is secondary data from multiple data sources, such as the International Financial Statistics of the IMF, World Bank, Bank Indonesia report, Central Bureau of Statistics (BPS) and other sources. All of the data used in this study are the annual data for each research variable from 1986 to 2015. The result show that there is significant influence between the variables Liberalism trade and government spending to the inflation rate. Similar results were found on the influence of trade liberalism and the level of inflation on welfare having significant influence. But unlike the effect of government spending on welfare who has no direct influence. However, it was found that the rate of inflation mediating variables influence trade liberalism and government spending on welfare.

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