Document Type : Original Research

Authors

Department of Economics, State University of Medan, North Sumatra, Indonesia

Abstract

Economic growth is one of the major keys in the development of a country. This research aims to analyze the effect of capital accumulation growth, the regional minimum wages, and total factor productivity growth against Indonesia's economic growth. The analysis in this study uses the equation by the method of Error Correction Model (ECM). This study analyzed the relationship between the independent variable and the dependent variable, both in the short-term and long-term. Estimation results show that in the short-term both the variable capital accumulation, the regional minimum wage and total factor productivity growth affect Indonesia's economic growth but in the long-term, there are two variables that influence positive and insignificant i.e. investment, the Regional Minimum wage affects economic growth in Indonesia. And Total Factor Productivity growth in the long-term have a positive and significant influence on economic growth in Indonesia. Thus, it can be concluded that Total Factor Productivity is the main determining factor affecting economic growth in Indonesia.

Keywords

Arsyad, L. (2002). Pengantar Perencanaan Dan Pembangunan Ekonomi Daerah.
De, P. (2006). Total factor productivity growth: Indian ports in the Era of globalization. Maritime Economics and Logistics. https://doi.org/10.1057/palgrave.mel.9100164
Froyen, R. T. (1996). The Evolution of Macroeconomic Theory and Implications for Teaching Intermediate Macroeconomics. Journal of Economic Education. https://doi.org/10.1080/00220485.1996.10844900
Gregory Mankiw, N. (2014). Macroeconomía. Harvard University. https://doi.org/ 10.1111/j.1467-6486.1993.tb00315.x
Jhingan, M. L. (2006). The Economics of Development and Planning. Vrinda Publications (p) LTD.
Johannes, T. A., & Njong, A. M. (2012). Fiscal policy, labor productivity growth and convergence between agriculture, and manufacturing: Implications for poverty reduction in Cameroon. Asian Social Science. https://doi.org/10.5539/ass.v8n 4p190
Kamruzzaman, M., Manos, B., Psychoudakis, A., & Martika, M. (2006). Food policy in Bangladesh 2010: Impacts of domestic wheat productivity growth. International Journal of Social Economics. https://doi.org/10.1108/03068290610651625
Kim, S., & Han, G. (2001). A Decomposition of Total Factor Productivity Growth in Korean Manufacturing Industries: A Stochastic Frontier Approach. Journal of Productivity Analysis. https://doi.org/10.1023/A:1012566812232
Mankiw, N. G. (2007). Makroekonomi,(Edisi 6). Jakarta: Erlangga.
Nachrowi, D Nachrowi; Usman, H. (2006). Ekonometrika untuk Anlasisi Ekonomi dan Keuangan. Lembaga Penerbit FE UI. https://doi.org/10.1787/9789264073937-en
Ramayani, C. (2012). Analisis Produktivitas Tenaga Kerja dan Ekonomi Indonesia. Jurnal Kajian Ekonomi.
Solow, R. (2010). Technical Change and the Aggregate Production Function. In Real Business Cycles. https://doi.org/10.4324/9780203070710.pt7
Solow, R. M. (1956). A Contribution to the Theory of Economic Growth. The Quarterly Journal of Economics. https://doi.org/10.2307/1884513
Sukirno, S. (2015). makroekonomi teori pengantar. In makroekonomi teori pengantar. https://doi.org/10.1109/GLOCOM.2010.5684293
Suparmoko, M. (2016). Pertumbuhan Ekonomi, Distribusi Pendapatan dan Lingkungan. Unisia. https://doi.org/10.20885/unisia.vol28.iss57.art7
Tang, M. C., & Chyi, Y. L. (2008). Legal environments, venture capital, and total factor productivity growth of Taiwanese industry. Contemporary Economic Policy. https://doi.org/10.1111/j.1465-7287.2008.00105.x
Todaro, M. (2000). Theories of Development : A Comparative Analysis. Economic Development.
Waisgrais, S. (2003). Wage Inequality and the Labour Market in Argentina: Labour Institutions, Supply and Demand in the Period 1980-99. SSRN. https://doi.org/10.21 39/ssrn.334920