The Effect of Macroeconomic Factors on Income Inequality: Evidence from Indonesia

Andi Sessu, Sessu The Effect of Macroeconomic Factors on Income Inequality: Evidence from Indonesia. Journal of Asian Finance, Economics and Business, 8. pp. 55-66.

Text The Effect of Macroeconomic Factors on Income Inequality_ Evidence from Indonesia.pdf Download (526kB)

Abstract

The purpose of this study is to analyze the relationship and effects of variables both directly and indirectly (e.g., investment (INV),
government expenditure (GE), unemployment rate (UR), economic growth (EG), and income inequality). The analytical phases consist,
first, to transform the data using the Log Natural (Ln) method. Second, to check normality and multicollinearity of data. Third, to test
direct effects of variables (government expenditure and investment effect on the unemployment rate and economic growth; investment on
government expenditure; economic growth on unemployment rate; economic growth and unemployment rate on income inequality). Fourth,
to test indirect effects using Sobel test, which involves UR and EG as intervening variable. Fifth, to test hypotheses with p-value < 0.05.
The results of the study reveal that, of the 12 relationships, statistics show that 11 variations of the association have significant positive and
negative effects. Theoretically, the different characters and goals of GE and INV in each country will have a different impact on EG and
UR goals. The study provides an input, especially for the government. To create optimal EG through GE and INV, it is necessary to allocate
budgets to industrial sectors that can absorb a massive labor force and to new economic growth sectors.

Item Type:	Article
Uncontrolled Keywords:	Government Expenditure, Investment, Unemployment, Economic Growth, Income Inequality
Subjects:	A General Works
Depositing User:	ST Bahar Sobari
Date Deposited:	11 Jul 2021 12:49
Last Modified:	11 Jul 2021 12:49
URI:	http://repository.uhamka.ac.id/id/eprint/8829

Actions (login required)

View Item