MACRO SOCIO ECONOMIC DETERMINATION OF INCLUSIVE ECONOMIC DEVELOPMENT IN INDONESIA Rinaldi Syahputra, T. Zulham, Sofyan Syahnur, Taufiq C. Dawood
Universitas Samudra
Abstract
Inclusive economic development can occur when there is strong economic growth. Until 2012, Indonesia^s economic growth has not been inclusive in terms of reducing poverty, reducing inequality or increasing employment opportunities. The process of inclusive economic development will be accelerated by a more inclusive relationship between economic sectors and an educated population. The purpose of this study is to simulate the relationship between democracy, investment, human capital, trade through exports, inflation as a representation of the domestic economy, and inclusive economic development. This study uses panel autoregressive distributed lag (ARDL) model with KAO cointegration test used in this study and comparison with panel vector error correction model (VECM) as a form of government policies implemented related to inclusive economic development and cointegration of the variables studied in the short run and long run. The dataset used in this study covers several provinces in Indonesia and covers the period 2011 to 2022. The findings of this study are that with an emphasis on inclusiveness, Indonesia is actively pursuing broad and sustainable economic reforms. The three main pillars of a transition are the eradication of poverty and extreme poverty, the improvement of health and education standards, the promotion of applied research and industrial revitalisation, and the strengthening of corporate competitiveness. All independent factors have substantial short-term and long-term relationships with the dependent variable, which affects the sustainability of economic development. Changes in one variable will have an impact on the other variables. Changes or improvements in the independent variables impact what Indonesia can consistently offer to create employment opportunities. This study shows that maintaining and improving community access and political engagement is positively correlated with necessary economic policies.
Keywords: macrosocioeconomic, inclusive economic development, autoregressive distributed lag, community access
