Tag: Panel Vector Autoregressive

DOES GOODS AND SERVICES SPENDINGS REDUCE INCOME INEQUALITY? A PANEL DATA EVIDENCE FROM INDONESIA

B. S. NAZAMUDDIN

Senior Lecturer, Faculty of Economics and Business, Universitas Syiah Kuala, Banda Aceh, Indonesia

nazamuddin@unsyiah.ac.id

Khairul AMRI

Lecturer, Faculty of Islamic Economics and Business, Universitas Islam Negeri Ar-raniry, Banda Aceh, Indonesia

khairul.amri@ar-raniry.ac.id

(corresponding author)

Abstract

The main purposes of our study are to investigate the effect of goods & services spending (GSS) and social spending (SS) on income inequality (GR). Using a panel data set of 26 provinces in Indonesia from 2005 to 2015, panel vector autoregressive and Granger causality test are employed to explore the causal relationship of the variables. The study found out that the SS has a negative and significant effect on GR at the 2-period horizon. The GR has a positive and significant effect on the GSS at the 4-period horizon, but negative and significant effects at the 3-period horizon. The result of the Granger causality test indicates that there is a unidirectional causality running from GSS to SS, and bidirectional causality exists between GR and SS, and between GR and GSS.

Keywords: Income inequality, goods and services spendings, social spendings, Panel Vector Autoregressive, and Granger Causality test.

JEL classification: D33, H53, I38

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IS THERE A CAUSALITY RELATIONSHIP BETWEEN LAW ENFORCEMENT, CRIME RATES, AND ECONOMIC GROWTH? AN EMPIRICAL EVIDENCE FROM WESTERN INDONESIA

Syarifuddin HASYIM

Senior Lecturer, Faculty of Law, Universitas Syiah Kuala, Banda Aceh, Indonesia

syarifuddin_hasyim@unsyiah.ac.id

Muhammad ZULHILMI

Senior Lecturer, Faculty of Islamic Economics and Business, Universitas Islam Negeri Ar-raniry, Banda Aceh, Indonesia

muha.zul@gmail.com

Khairul AMRI

Lecturer, Faculty of Islamic Economics and Business, Universitas Islam Negeri Ar-raniry,

Banda Aceh, Indonesia

khairul.amri@ar-raniry.ac.id

(corresponding author)

Abstract

The economic impact of law enforcement and crime rates empirically has not been widely revealed by researchers. In fact, in general, economic activities can be related to security factors. This study analyzes the influence of law enforcement and crime on economic growth. Using a panel data set of 8 provinces from western Indonesia during the period 2006-2017, the study found that there were no long-run relationships between the three variables. In the short-run, law enforcement and crime rates have a positive and significant effect on economic growth. Law enforcement has a significant and negative effect on crime rates, and vice versa crime rates have a positive and significant effect on law enforcement. The results of the Granger causality test indicate the existence of bidirectional causality between crime rates and law enforcement and between law enforcement and economic growth. Furthermore, unidirectional causality exists running from crime to economic growth.

Keywords: Economic Growth, Law Enforcement, Crime Rates, Panel Vector Autoregressive, and Granger Causality Test.

JEL classification: K14, K42, O47
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