Convergence Analysis of Economic Growth in East Java

Abstract

Convergence and divergence of economic growth is a regional economic issue. The concept of convergence occurs when areas with poor economies tend to grow faster than areas with a rich economy whereas divergence occurs otherwise. East Java has a high economic growth but has a high inequality between districts/municipalities as well. Based on the concept of the inverted U-shape of the Kuznets curve, the East Java situation thus indicates that East Java is at the starting point of economic development. Therefore, it is necessary to develop high economic growth with low inequality through acceleration of convergence by knowing the level of convergence of economic growth and acceleration factors of economic growth convergence of East Java. This study uses panel data from 38 districts/municipalities in East Java between 2005 and 2014 by adopting the model Barro & Sala-i-Martin (1992) then the model specification in answering research objectives are sigma convergence, absolute convergence, and conditional convergence. The estimation results show that in East Java economic growth is convergent at a low level so that efforts need to accelerate the convergence that can be reached through 5 (five) development policies, (i) equalization of basic infrastructure such as access equity (ii) equal distribution of energy availability, (iii) equalization of investment, (iv) equal distribution of labor force, and (v) equality of labor productivity

Fiscal Decentralization and Per Capita Income Convergence between Regencies/Municipalities in Java Island

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Determinan pertumbuhan ekonomi berkelanjutan wilayah induk dan pemekaran di kawasan timur Indonesia

“…Hal ini memicu penurunan kesejahteraan dan tertinggalnya daerah tersebut dari segi kemajuan ekonomi serta teknologi (Rustiadi, Saefulhakim, & Panuju, 2011). Oleh karena itu, peran pemerintah dalam mengurangi tingkat ketimpangan dengan melemahkan backwash effect dan memperkuat spread effect sangat penting (Amalia & Santoso, 2018) Dikaitkan dengan teori tersebut, maka dalam hal ini KTI telah menerapkan teori di atas dengan berproliferasi menjadi daerah induk dan pemekaran. Dari efek positif yang diharapkan akan terjadi, diduga terdapat perbedaan pertumbuhan ekonomi bagi daerah induk dan daerah pemekaran.…”

Real Business Cycle: Stochastic driving force decomposition of output dynamics in East Java

“…Numerous empirical studies have investigated the dynamics of economic growth (Amalia et al, 2018;Susilo et al, 2020), consumption (Zulkarnain, 2022), investment (Qurrata & Ramadhani, 2021), as well as unemployment and wages (Christianto et al, 2022) in East Java. However, these studies often rely on regression analysis or autoregressive models without robust theoretical foundations.…”