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Journal : Jurnal Studi Pemerintahan

DISENTANGLING THE ASSOCIATION BETWEEN GOVERNMENT DEBT AND ECONOMIC GROWTH: A GRANGER CAUSALITY APPROACH FROM INDONESIA SIJABAT, ROSDIANA
Jurnal Studi Pemerintahan Vol 11, No 1 (2020): February 2020
Publisher : Universitas Muhammadiyah Yogyakarta

Show Abstract | Download Original | Original Source | Check in Google Scholar | Full PDF (489.058 KB)

Abstract

This paper aims to examine the possible Granger-causality relationship between public debt and economic growth in Indonesia between 1998 and 2018. To accomplish this aim, a time series regression approach as well as diagnostic tests such as the Augment Dickey–Fuller test and Johansen cointegration test (which provides evidence of a long-term relationship between external debt and economic growth) were conducted. A VECM Granger causality approach was chosen to investigate the causal link between government and economic growth. The VECM estimation provides new evidence that, over the long term, domestic debt has significantly and positively affected economic growth; at the same time, external debt has significantly and negatively affected economic growth. Meanwhile, Granger-causality analysis shows that economic growth has a unidirectional causal relationship with external public debt, but does not have such a relationship with domestic public debt. For this study, a series of 20 data points per variable were analyzed, covering 1998 through 2018. This sample size is rather small, and as such its findings are not perfect. The use of a much larger data set would enhance any similar studies in the future. Nonetheless, this study illuminates the role of government debt in the economy by highlighting the importance of domestic markets as sources of public debt to promote economic growth in Indonesia, and recommends that the government do so.
Do Productive Government Expenditures Affect Economic Growth? Evidence from Provincial Governments across Indonesia SIJABAT, ROSDIANA
Jurnal Studi Pemerintahan Vol 8, No 1 (2017): February 2017
Publisher : Universitas Muhammadiyah Yogyakarta

Show Abstract | Download Original | Original Source | Check in Google Scholar | Full PDF (1792.297 KB) | DOI: 10.18196/jgp.8149

Abstract

This study is intended to examine the impacts of productive expenditures on economic growth on the 25 provinces found in Indonesia before fiscal decen- tralization (covering 1994–1997) and 33 provinces after decentralization over the period 2011-2015. The empiric approach has been implemented through a panel data approach and regression model estimated to follow the endogenous growth model of Barro (1990). The main findings of this research show that: (1) provincial governments’ productive expenditures in education promoted eco- nomic growth in the 25 pre-decentralization provinces; and (2) productive ex- penditures in the security and public order sector, health and education sector have promoted economic growth in the 33 post-decentralization provinces. From these results, it can be concluded that this study has contributed to economic literature by indicating that different types of productive government expendi- tures offer different impacts on economic growth. The policy implications which can be formulated from the results of this study are that provincial governments should promote and provide incentives for private investments in the public sec- tor because only the education sector (before fiscal decentralization) and the security and public order sector as well as the education sector (after fiscal decentralization) have a statistically significant role in promoting economic growth. This can be realized through public–private partnership, which has greatly in- creased the performance of public-sector investment around the world. Future research, using relevant control variables to estimate the effects of productive expenditures on economic growth, will provide a greater empiric contribution to the literature.
DISENTANGLING THE ASSOCIATION BETWEEN GOVERNMENT DEBT AND ECONOMIC GROWTH: A GRANGER CAUSALITY APPROACH FROM INDONESIA ROSDIANA SIJABAT
Jurnal Studi Pemerintahan Vol 11, No 1 (2020): February 2020
Publisher : Universitas Muhammadiyah Yogyakarta

Show Abstract | Download Original | Original Source | Check in Google Scholar | DOI: 10.18196/jgp.111109

Abstract

This paper aims to examine the possible Granger-causality relationship between public debt and economic growth in Indonesia between 1998 and 2018. To accomplish this aim, a time series regression approach as well as diagnostic tests such as the Augment Dickey–Fuller test and Johansen cointegration test (which provides evidence of a long-term relationship between external debt and economic growth) were conducted. A VECM Granger causality approach was chosen to investigate the causal link between government and economic growth. The VECM estimation provides new evidence that, over the long term, domestic debt has significantly and positively affected economic growth; at the same time, external debt has significantly and negatively affected economic growth. Meanwhile, Granger-causality analysis shows that economic growth has a unidirectional causal relationship with external public debt, but does not have such a relationship with domestic public debt. For this study, a series of 20 data points per variable were analyzed, covering 1998 through 2018. This sample size is rather small, and as such its findings are not perfect. The use of a much larger data set would enhance any similar studies in the future. Nonetheless, this study illuminates the role of government debt in the economy by highlighting the importance of domestic markets as sources of public debt to promote economic growth in Indonesia, and recommends that the government do so.
EXAMINING THE IMPACT OF ECONOMIC GROWTH, POVERTY AND UNEMPLOYMENT ON INFLATION IN INDONESIA (2000-2019): EVIDENCE FROM ERROR CORRECTION MODEL Rosdiana Sijabat
Jurnal Studi Pemerintahan Vol 13, No 1 (2022): February 2022
Publisher : Universitas Muhammadiyah Yogyakarta

Show Abstract | Download Original | Original Source | Check in Google Scholar | DOI: 10.18196/jgp.v13i1.12297

Abstract

The study examines the causal relationship of economic growth, poverty, unemployment, and inflation in Indonesia from 2000 to 2019. The data analyzed are sourced from World Bank Indicators from The World Bank. The variables studied were inflation as the dependent variable and economic growth, the level of poverty, and the unemployment rate, inflation, as an independent variable. The results of the Augmented Dicky-Fuller test show that there is a unit root problem because all variables are not stationary at the level, so it is continued by doing first differencing, and stationary data is found in the first difference or I(1). Using the Vector Error Correction Model (VECM), this study found a significant long-term relationship between inflation (INF), economic growth (GP), the poverty rate (POV), and the unemployment rate (UNEMP). Meanwhile, in the short term, economic growth and poverty rates have a significant adverse effect on inflation. The results have important policy implications, specifically, the urgency of government policies and interventions to encourage the expansion of economic activities that promote economic growth and eradicate poverty.
Do Productive Government Expenditures Affect Economic Growth? Evidence from Provincial Governments across Indonesia ROSDIANA SIJABAT
Jurnal Studi Pemerintahan Vol 8, No 1 (2017): February 2017
Publisher : Universitas Muhammadiyah Yogyakarta

Show Abstract | Download Original | Original Source | Check in Google Scholar | DOI: 10.18196/jgp.8149

Abstract

This study is intended to examine the impacts of productive expenditures on economic growth on the 25 provinces found in Indonesia before fiscal decen- tralization (covering 1994–1997) and 33 provinces after decentralization over the period 2011-2015. The empiric approach has been implemented through a panel data approach and regression model estimated to follow the endogenous growth model of Barro (1990). The main findings of this research show that: (1) provincial governments’ productive expenditures in education promoted eco- nomic growth in the 25 pre-decentralization provinces; and (2) productive ex- penditures in the security and public order sector, health and education sector have promoted economic growth in the 33 post-decentralization provinces. From these results, it can be concluded that this study has contributed to economic literature by indicating that different types of productive government expendi- tures offer different impacts on economic growth. The policy implications which can be formulated from the results of this study are that provincial governments should promote and provide incentives for private investments in the public sec- tor because only the education sector (before fiscal decentralization) and the security and public order sector as well as the education sector (after fiscal decentralization) have a statistically significant role in promoting economic growth. This can be realized through public–private partnership, which has greatly in- creased the performance of public-sector investment around the world. Future research, using relevant control variables to estimate the effects of productive expenditures on economic growth, will provide a greater empiric contribution to the literature.