Policies to Eliminate Poverty Rate in Indonesia

Akhsyim Afandi, Dwi Wahyuni and Jaka Sriyana
Additional contact information
Akhsyim Afandi: Department of economics, Universitas Islam Indonesia, Yogyakarta, Indonesia,
Dwi Wahyuni: Department of economics, Universitas Islam Indonesia, Yogyakarta, Indonesia

International Journal of Economics and Financial Issues, 2017, vol. 7, issue 1, 435-441

Abstract: This study aims to analyze the factors that influence the poverty rate in Indonesia in the period of 1981-2013. This research uses Error Correction Model (ECM) to estimate the empirical poverty model. The findings may be explained as follows: Economic growth does not influence the poverty reduction; meanwhile inflation has a significant positive effect on the poverty level. Foreign direct investment (FDI) as an indicator of economy openness has a negative impact on the poverty. In addition, Gini ratio as an income equality measurement has no significant influence on the poverty level. These findings show that the poverty level depends on macroeconomic instability especially price level. Higher inflation rate leads to higher rate of poverty in the country. Furthermore, the central government should keep the monetary sector using tight monetary policy to eliminate the poverty level.

Keywords: Gross Domestic Product; Investment; Inflation; Gini Ratio; Poverty (search for similar items in EconPapers)
JEL-codes: E01 E31 I32 (search for similar items in EconPapers)
Date: 2017
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (2)

Downloads: (external link)
http://www.econjournals.com/index.php/ijefi/article/download/3299/pdf (application/pdf)
http://www.econjournals.com/index.php/ijefi/article/view/3299/pdf (text/html)

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:eco:journ1:2017-01-56

Access Statistics for this article

International Journal of Economics and Financial Issues is currently edited by Ilhan Ozturk

More articles in International Journal of Economics and Financial Issues from Econjournals
Bibliographic data for series maintained by Ilhan Ozturk ().