Jurnal Ilmu Ekonomi Terapan

Political-Economic Comparison of The World Bank and The New Development Bank

Yeremia Nicolaus Widjanarko — Tue, 25 Jun 2024 00:00:00 +0700

Although stated as one of the influential actors in international relations and discussed in many previous studies, MDB had yet to be comprehensively depicted. Through this research, the author intended to fill this gap by comparing the World Bank as a traditional MDB and the New Development Bank as a Neo MDB within the international economic order. By comparing the political and economic anatomy such as ownership structure, distribution of voting power in decision-making, establishment objectives, types of financing services, operational coverage, sources of funding, private sector options, and service customization and examining them using an organizational political-economy approach, the author found both MDBs had significant differences in carrying out their functions as cross-border financial institutions.

The Effect of Money Supply on Exchange Rate in ASEAN-5: Empirical Test of Dornbusch Overshooting Model

Ulil Maghfiroh, Akhmad Jayadi, Magdalena Triasih Dumauli — Tue, 25 Jun 2024 00:00:00 +0700

The primary purpose of this study is to analyze the effects of the money supply on exchange rates in ASEAN-5 and whether there is an exchange rate overshooting phenomenon with the application of the Dornbusch Overshooting Model. This study uses the Autoregressive Distributed-Lag (ARDL) method to analyze the short and long-term effects and uses time series data from 1980 to 2021 in ASEAN-5. The results of this study are still ambiguous in finding the overshooting phenomenon in ASEAN-5. In the short term, the research results support overshooting in two countries, Malaysia and Thailand. However, in the long term, no positive and significant influence was found between the money supply gap and exchange rate misalignment in ASEAN-5. Besides that, the inflation gap, interest rate gap, and output gap also greatly influence changes in exchange rate misalignment and have different significant effects in the short and long term.

Labor Market Transformation: Implications of Technological Change in Society 5.0

Abd. Kholik Khoerulloh, Holis Abdul Aziz — Tue, 25 Jun 2024 00:00:00 +0700

Society 5.0 is resulting in transformation across a wide range of sectors, including manufacturing, education, healthcare, and services. Through the adoption of artificial intelligence, machines can carry out tasks that previously could only be performed by humans, resulting in significant changes in the types of jobs and skills available in the labor market. This research aims to detail and identify how technological changes affect the labor market, as well as explore solutions and strategies to capitalize on opportunities and deal with challenges that arise from these changes for society's overall well-being. This research uses a literature study method with a predictive approach. The results showed that in the era of Society 5.0, people must improve their skills through education and training to adapt to the changes. Cross-sectoral cooperation between the government, the private sector, and the community is crucial. Joint efforts to formulate supportive policies and innovation in creating new sustainable jobs are vital to mitigating the negative impacts and harnessing the positive potential of technological change in the labor market. This research is expected to have a significant impact, ranging from policy development to improving social welfare, by comprehensively understanding how technology affects life and work in modern society.

Shadow Economy: Determinants and Its Impact on Foreign Direct Investment

Unggul Heriqbaldi, Salwaa Fauziyyah Jatmiko — Tue, 25 Jun 2024 00:00:00 +0700

The shadow economy poses a significant threat to government revenue and the effectiveness of economic policies. This paper investigates the causes of the shadow economy and its influence on foreign direct investment (FDI). Our study employs the currency demand approach, a component of the indirect method, to identify the determinants of the shadow economy in a dataset covering 105 countries from 2001 to 2017. These countries are categorized into four income groups: high-income, upper-middle-income, lower-middle-income, and low-income. Parameter estimation is conducted using the Generalized Method of Moments (GMM) model, with robustness tests incorporating reference estimates from Partial Least Squares (PLS) and Fixed Effects Model (FEM). Our findings indicate that a higher GDP and lower interest rates are associated with reduced shadow economy activity. Elevated market interest rates increase the cost of funds in the informal sector, discouraging engagement in shadow economic activities due to reduced profitability. Furthermore, higher tax revenues correlate with intensified regulatory enforcement, increasing the risks associated with shadow economy involvement. A larger workforce and lower unemployment rates similarly diminish shadow economy activity. In the context of foreign direct investment (FDI), the shadow economy positively affects FDI flows when formal institutions, including legal frameworks, property rights protection, and regulatory systems, are either weak or overly burdensome. In such scenarios, economic actors may opt for informal channels like the shadow economy, offering a flexible and cost-effective alternative to the formal sector, a crucial consideration for foreign investors.

The Effect of Balikpapan-Samarinda Toll Road Construction with a PPP Scheme on The Formation of Economic Structure in East Kalimantan

Aisyah Tarassyta, Ilmiawan Auwalin — Tue, 25 Jun 2024 00:00:00 +0700

Economic effects are just one of the many effects of the massive infrastructure investment in Indonesia made over the past ten years. The aim of connecting Indonesia between regions is the basis for massive infrastructure growth, especially toll road infrastructure. Several funding schemes have been implemented to build toll road infrastructure, including the Public-Private Partnership (PPP) financing scheme. This PPP financing scheme was also implemented in the Balikpapan-Samarinda toll road construction. Therefore, this research attempts to capture the impact of the construction of the Balikpapan-Samarinda toll road with a PPP scheme on the formation of the economic structure in East Kalimantan province using the Input-Output (I-O) table. The investment value for the Balikpapan-Samarinda toll road is IDR 9.97 trillion was injected (shock) into gross fixed capital formation in the construction sector. The calculation results in this research show that the construction of the Balikpapan-Samarinda toll road contributed 9.8% of total demand. Apart from that, there is a significant impact on the economic structure of East Kalimantan Province, as seen from the expenditure multiplier figure with an output total of IDR 15,111 billion, a total income of IDR 2,471 billion, and a total workforce of 25,095 workers due to investment in the construction of the Balikpapan-Samarinda toll road.

Analysis of Income Inequality in ASEAN Countries

Akila Anasta, Widya Sylviana — Tue, 25 Jun 2024 00:00:00 +0700

This study aims to analyze income inequality in ASEAN countries. The variables in this study are income inequality as the dependent variable, FDI, GDP per capita, personal remittances, and economic openness as independent variables. The scope of this research is ASEAN countries from 2009 to 2021. This research uses panel data regression method. The estimation results in this study show that FDI and GDP per capita variables significantly affect income inequality in ASEAN. Meanwhile, personal remittance and economic openness have no significant effect.

Electrical Demand Analysis on Households and Industry in Indonesia

Margareth Kartika, Nur Aini Hidayati — Tue, 25 Jun 2024 00:00:00 +0700

This research aims to determine the response of the household sector and industrial sector to electricity demand when there are changes in prices and income. The influence of price and income on electricity demand from both sectors can be seen through their elasticity. The approach used in this study is panel data from 33 provinces in Indonesia for the 2010-2020 time period. Panel data regression estimation techniques are used in this study to estimate the elasticity value. The results show that price elasticity in the household and industrial sectors is negative inelastic, but price does not significantly influence household electricity demand. Unlike price, income elasticity has a much higher value and positively and significantly influences electricity demand in both sectors. The number of customers, which reflects the increasing electrification ratio and population growth, significantly impacts electricity demand in the household and industrial sectors. Based on the results, it was found that the number of customers most influences electricity demand in the household sector. At the same time, income has the most significant influence on electricity demand in the industrial sector.

The Effect of Foreign Direct Investment and Inflation on The Economic Growth of ASEAN Countries 2009-2020

Firyal Ramadhanty, Wasiaturrahma Wasiaturrahma, Anas Iswanto Anwar Makatutu — Tue, 25 Jun 2024 00:00:00 +0700

This study aims to analyze the effect of foreign direct investment and inflation on economic growth in ASEAN countries. The analytical method used is a quantitative approach with multiple linear regression panel data method based on secondary data from foreign direct investment, inflation, and economic growth variables in 2009-2020. The analysis results show that FDI has no significant impact on the economic growth variable, and the inflation rate has a significant positive impact on the economic growth variable.

The Influence of Government Expenditure on the Human Development Index in NTT Province

Marianus Antonius Deo Datus Banase, Rudi Purwono — Tue, 25 Jun 2024 00:00:00 +0700

Researchers analyzed government spending on health, education, and infrastructure in influencing the human development index in NTT Province. The research data is panel data in 22 districts/cities, namely health, education, and infrastructure expenditure data for 2010-2022. Panel data regression analysis used the pooled least square method to analyze government spending. The results found that government spending on health, education, and infrastructure together (simultaneously) significantly influenced the human development index in districts/cities in NTT province. Another analysis found that government spending on health and education partially influenced the human development index significantly in the districts/municipalities of the NTT province. However, spending on infrastructure partially had no significant effect on the human development index in the districts/municipalities of the NTT province. The implications of the research are improvements in health, education, and infrastructure that can increase development.

The Interplay of Financial Literacy on the Financial Behavior and Well-being of Young Adults: Evidence from Nigeria

Tue, 25 Jun 2024 00:00:00 +0700

The financial stability of young adults worldwide is under threat due to widespread impulsive online purchasing and the economic strain brought on by the COVID-19 pandemic. This study, therefore, examines the role of financial literacy as a mediator between financial behavior and the financial well-being of young adults, specifically in Nigeria. The research involved 120 respondents, 60 undergraduate and 60 postgraduate students from three selected universities in Western Nigeria. Information was gathered through a structured questionnaire. Data analysis was conducted using Structured Equation Modeling with STATA version 15. The findings reveal a positive association between financial behavior and financial well-being, although this relationship lacks statistical significance. However, significant positive correlations are observed between financial literacy (FL) and financial well-being (FW), as well as between financial behavior (FB) and financial literacy (FL). Furthermore, the analysis uncovers a positive indirect effect of financial literacy on the relationship between financial behavior and financial well-being. This suggests that while the direct link between financial behavior and well-being may be weak, improved financial behavior can indirectly enhance well-being through heightened financial literacy. In essence, the study underscores the crucial role of financial literacy in improving young adults' financial behaviors and well-being. By investing in education, support services, and policies that encourage positive financial behaviors, both individuals and policymakers can collaborate toward constructing a more financially secure future for the younger generation.

The Influence of Economic Complexity Index on Income Inequality in G20 Forum Countries

Miftachul Jannah Meilina Subekti, Dyah Wulan Sari — Tue, 25 Jun 2024 00:00:00 +0700

This research examines the influence of the economic complexity index, GDP per capita, gross higher education participation ratio, government spending on education, and fertility rates on income inequality in G20 Forum member countries from 2010 to 2019. The dynamic panel data regression method with the two-step System Generalized Method of Moments (SYS-GMM) estimation technique is used to analyze the data in this study. The findings reveal that the economic complexity index, GDP per capita squared, government spending on education, and fertility levels have a negative and significant effect on income inequality. Meanwhile, GDP per capita and gross enrollment rates in tertiary education have a significant positive effect on income inequality. This study shows that the economic complexity index and the quality of human resources can reduce income inequality. Therefore, policies that focus on improving the quality of human resources need to be considered to encourage innovation, increase GDP per capita, and ultimately reduce income inequality.

Analyzing the Combined Role of Good Governance and GDP on Women Literacy in African Countries

Mohammad Himel — Tue, 25 Jun 2024 00:00:00 +0700

Most African countries have been affected due to economic crises regarding hyperinflation and lower agricultural productivity, civil war, lower infrastructural and transportation systems, social and domestic violence, food insecurity due to bad agricultural systems, social and religious inequality, mismanagement of governing systems with defective bureaucracy, environmental degradation and lower practice for sustainable development. In this paper, the author tries to find out two research objectives i) To measure the good governing variables on women literacy between East and West African countries ii) To measure the joint impact of good governance and GDP level between these two countries. The author uses secondary dataset from The World Bank site on quantitative analysis where the author uses multiple regression model for general regression and integrated regression model. At the time of multiple regression (Model 1), GDP, IF, P.S., R.Q. has a positive connection with women literacy for EAC. On the contrary, PHR, FLF, DOFC, R.L. create a negative effect on women's literacy in EAC. But in (Model 2), if the good governance variable connects with GDP for long-lasting development, (GDP*PS), (GDP*RQ) has positive connection with W.L. in EAC. Reversely, L.E., PHR, G.E., R.Q., CC has positive and significant impact in WAC where these variables enhance women literacy to be improved at significant rate (Model 3) where DOFC and EFC has reverse connection with W.L. In spite of case, if GDP connects with good governance variables, (GDP*RQ) and (GDP*PS) has positive connectivi-ty with W.L. in WAC. Policy makers should highlight to promote effective R.L. and G.E. to improve macroeconomic development in EAC where governments of WAC should focus on R.L. and G.E. to ensure women empowerment and social security for sustainable development. Establishing good governance's variables in African countries is carrying need to ensure women empowerment, lessening gender inequality, ensuring women safeness and sustainable development etc.