Investigating the Effect of Property Investment and Inflation on Economic Growth in Indonesia
https://doi.org/10.56225/ijassh.v3i2.322
Keywords:
Economic Growth, Property Investment, Inflation, ARDL Panel ModelAbstract
Sustained economic growth is essential to sustainable development and overall societal prosperity. This phenomenon denotes the continuous enhancement of a nation's economic conditions over time, characterised by elevated levels of economic activity compared to preceding periods. Economic growth is typically correlated with improved societal welfare, which is a key indicator of successful economic development. However, it is imperative to consider additional factors such as income distribution to comprehensively assess the impact of growth on well-being. Establishing economic growth is fundamental to sustainable economic development and prosperity. The primary objective of this study is to investigate the short- and long-run effects of Property Investment and Inflation on economic growth in Indonesia and examine the equilibrium relationship between Property Investment and Inflation on economic growth from the short run to the long run. To achieve this objective, this study employs the autoregressive distributed lag (ARDL) Panel Model and a cointegration test to establish short- and long-run relationships. The results indicate a short-to long-run equilibrium among the variables. An additional finding is that property investment has a positive effect on economic growth in the long run but no effect in the short run. The inflation variable demonstrates a positive effect on economic growth in the long run but no effect in the short run.
Downloads
References
Abidin, R. N., Syahnur, S., Suriani, S., Kuala, U. S., & Aceh, K. B. (2022). Pengaruh Variabel Makroekonomi terhadap Utang Luar Negeri di Negara ASEAN-7 The Effect of Macroeconomic Variables on External Debt in ASEAN-7 Countries. 13(28), 136–150. https://doi.org/10.33059/jseb.v13i2.3984
Attari, M. I. J., & Javed, A. Y. (2013). Inflation, economic growth and government expenditure of Pakistan: 1980-2010. Procedia Economics and Finance, 5(13), 58–67. https://doi.org/10.1016/s2212-5671(13)00010-5
Aydın, C., Esen, Ö., & Bayrak, M. (2016). Inflation and economic growth: A dynamic panel threshold analysis for Turkish Republics in transition process. Procedia - Social and Behavioral Sciences, 229, 196–205. https://doi.org/10.1016/j.sbspro.2016.07.129
Bangura, M., & Omojolaibi, J. A. (2024). Inflation - Economic growth nexus in Nigeria: New evidence on threshold effects. International Journal of Economic Policy, 4(1), 44–62. https://doi.org/10.47941/ijecop.1708
Boediono. (2018). Ekonomi Makro. BPFE.
Dammak, T. B., & Helali, K. (2017). Threshold Effects on the Relationship Between Inflation Rate and Economic Growth in Tunisia. International Economic Journal, 31(2), 310–325. https://doi.org/10.1080/10168737.2017.1289546
Fazaalloh, A. M. (2024). FDI and economic growth in Indonesia: a provincial and sectoral analysis. Journal of Economic Structures, 13(1). https://doi.org/10.1186/s40008-023-00323-w
Guo, P., Zhang, X., Zhu, J., & Sun, L. (2018). The moderate investment scale study of real estate promoting economic growth. 238–246. https://doi.org/238-246. 10.1061/9780784481745.028.
Hazmi, A., Kort, H. M., Khallouli, W., & Raissi, N. (2024). A Dynamic Interrelationships among Clean Energy, Environmental Pollution, and Economic Growth in GCC Economies: A Panel ARDL Approach. International Journal of Energy Research, 2024. https://doi.org/10.1155/2024/5571175
Kong, Y., Glascock, J. L., & Lu-andrews, R. (2016). An Investigation into Real Estate Investment and Economic Growth in China : A Dynamic Panel Data Approach. 1–18. https://doi.org/10.3390/su8010066
Kremer, S., Bick, A., & Nautz, D. (2013). Inflation and growth: New evidence from a dynamic panel threshold analysis. Empirical Economics, 44(2), 861–878. https://doi.org/10.1007/s00181-012-0553-9
Kusumatrisna, A. L., Sugema, I., & Pasaribu, S. H. (2022). Threshold effect in the relationship between inflation rate and economic growth in Indonesia. Buletin Ekonomi Moneter Dan Perbankan, 25(2), 117–132. https://doi.org/10.21098/bemp.v25i1.1045
Li, S.-G., Xu, X.-Y., Liu, Q.-H., Dong, Z., & Dong, J.-C. (2023). Financial development, real estate investment and economic growth. 55(54), 6360–6377. https://doi.org/doi.org/10.1080/00036846.2022.2154313
Lincolin, A. (2010). Ekonomi Pembangunan (5th ed.). Upp Stim Ykpn.
Liu, Y., Xu, J., & Liu, N. (2014). An empirical analysis of the relationship between real estate investment and economic growth in Shenyang. https://doi.org/10.1007/978-3-642-35548-6_42.
Munir, Q., Mansur, K., & Furuoka, F. (2009). Inflation and Economic Growth in Malaysia — A Threshold Regression Approach. ASEAN Economic Bulletin, 26(2), 180. https://doi.org/10.1355/ae26-2d
Pesaran, M. H., & Smith, R. (1995). Estimating long-run relationships from dynamic heterogeneous panels. In Journal of Econometrics (Vol. 68, Issue 1). https://doi.org/10.1016/0304-4076(94)01644-F
Ramadhaniyati, R., Gunawan, A., Susanti, S., & Triansyah, F. A. (2023). The Threshold Effect of Inflation on Regional Economic Growth in Indonesia. Almana : Jurnal Manajemen Dan Bisnis, 7(3), 472–479. https://doi.org/10.36555/almana.v7i3.2200
Razia, A., Omarya, M., Razia, B., Awwad, B., & Ruzieh, A. (2023). Examining how unemployment, inflation and their related aspects affected economic growth in Palestine: The period from 1991 to 2020. Heliyon, 9(11), e21081. https://doi.org/10.1016/j.heliyon.2023.e21081
Rizky, R. L., Agustin, G., & Mukhlis, I. (2016). Pengaruh Penanaman Modal Asing, Penanaman Modal Dalam Negeri Dan Belanja Modal Terhadap Pertumbuhan Ekonomi Provinsi Di Indonesia. Jurnal Ekonomi Dan Studi Pembangunan, 8(1), 9–16. https://doi.org/10.56076/jkesp.v6i3.2165
Sa’idu, B. M., & Muhammad, A. A. (2015). Do Unemployment and Inflation Substantially Affect Economic Growth? Journal of Economics and Development Studies, 3(2), 132–139. https://doi.org/10.15640/jeds.v3n2a13
Salim, & Budi, S. (2012). Hukum Investasi Indonesia. PT Raja Grafindo Persada.
Sari, M., Aliasuddin, & Sartiyah. (2019). Economic growth and poverty in Sumatra. Opción: Revista de Ciencias Humanas y Sociales, 35(23), 961–978.
Shen, S. (2021). Empirical research on the impact of real estate on economic development. 246–254. https://doi.org/10.4236/jmf.2021.112014
Suindyah D, S. (2018). Pengaruh Investasi, Tenaga Kerja Dan Pengeluaran Pemerintah Terhadap Pertumbuhan Ekonomi Di Propinsi Jawa Timur. EKUITAS (Jurnal Ekonomi Dan Keuangan), 15(4), 477–500. https://doi.org/10.24034/j25485024.y2011.v15.i4.166
Sukirno, S. (2011). Makroekonomi Teori Pengantar. Rajawali Pers.
Suparmoko, M. (2002). Ekonomi Publik, Untuk Keuangan danPembangunan Daerah. Andi.
Wen, X., Lei, S., Lv, Y., & Liao, B. (2021). The impact of real estate investment on economic growth: empirical studies from 31 Chinese Provinces (2006–2016). https://doi.org/10.1007/978-981-15-8892-1_45.
Winarno, T. (2014). The dynamics relationship between inflation and economic growth in Indonesia: A regional thresholds approach. 11(1), 1–9. http://link.springer.com/10.1007/978-3-319-59379-1%0Ahttp://dx.doi.org/10.1016/B978-0-12-420070-8.00002-7%0Ahttp://dx.doi.org/10.1016/j.ab.2015.03.024%0Ahttps://doi.org/10.1080/07352689.2018.1441103%0Ahttp://www.chile.bmw-motorrad.cl/sync/showroom/lam/es/
Xijun, W. (2010). The dynamic relationship between real estate investment and economic growth in China. https://doi.org/10.1109/ICCET.2010.5485735.
Yi, L. (2019). Empirical Study on the Relationship between Real Estate Investment and Economic Growth in Hainan Province. 68(Ssmi 2018), 762–766.
Zou, G., & 鄒高祿. (2002). An analysis of the interaction between economic growth and real estate investment in Hong Kong (1973-99). http://sunzi.lib.hku.hk/hkuto/record/B29766278.
Downloads
Published
How to Cite
Issue
Section
License
Copyright (c) 2024 Authors
This work is licensed under a Creative Commons Attribution 4.0 International License.
