Optimum: Jurnal Ekonomi dan Pembangunan

Analysis of the causality between economic growth and government spending: Wagner’s law versus Keynes hypothesis

Yasmin Yasmin — 2024-06-30

The relationship between economic growth and government spending has been extremely ambiguous over the last few years. In this matter, both Wagner and Keynes expressed their views. However, several research with varying results on those hypotheses. The Keynesian hypothesis, Indonesia's Wagner's law, and the relationship between economic growth and government spending were thus all investigated by the researchers in this study. The Granger causality test and the Engle-Granger cointegration test were used in order to determine the direction with which both variables are linked, as well as a longer-term association. The outcome demonstrated that economic growth and government spending do not have a long-term relationship. In contrast, the causality test revealed a one-way correlation between government spending and economic growth, implying that Wagner's law was applicable in Indonesia. Accordingly, the government must reconsider government spending that is perceived to be less efficient in encouraging economic growth, such as subsidy programs and public goods procurement. Additionally, the government ought to consider reducing government spending and expanding private sector participation in economic development given that Wagner's law has been demonstrated to be applicable in Indonesia.

Economies of scale, efficiency and profitability of the convection industry in the city of Palembang

Tomi Sandrat — 2024-06-30

The development of the industrial sector is greatly influenced by economies of scale, efficiency and profitability. The small convection industrial sector always follows changes in clothing models and creativity that consumers like. This research aims to find out the value of economies of scale and measure the level of efficiency and profitability in small convection industries in the city of Palembang. The type of data used is primary data related to small convection industries in Palembang City. The research method used is qualitative and quantitative with analysis of the scale of production results using the Cobb-Douglas production function, efficiency and profitability. The research results show that the variables of labor (X1), capital (X2) and digital technology (dummy) simultaneously and partially have a positive and significant effect on the amount of production (Y). The economic scale of the small convection industry in Palembang City is in a condition where the return to scale is decreasing. The efficiency value is above average at 52 percent and below average at 48 percent. Agencies or authorities at the Palembang City level, including related parties, are expected to be more active in socializing People's Business Credit so as to facilitate capital and marketing of small convection industries, because based on the results of in-depth interviews with respondents, overall they already have business capital, and the government is expected to be able to distribute it. assistance with production support equipment to business actors thereby providing encouragement to improve production performance.

Competitiveness of Indonesia’s export products with IJEPA cooperation framework

Lestari Sukarniati — 2024-06-30

Bilateral cooperation between Indonesia and Japan Economic Partnership Agreement (IJEPA) is a form of bilateral cooperation between Indonesia and Japan that carries the concept of the Economic Partnership Agreement (EPA). With one of IJEPA's goals in the form of capacity building, Bilateral cooperation between Indonesia and Japan Economic Partnership Agreement (IJEPA) is a form of bilateral cooperation between Indonesia and Japan that carries the concept of the Economic Partnership Agreement (EPA). With one of IJEPA's goals in the form of capacity building, IJEPA provides space for both parties to collaborate in order to increase the competitiveness of Indonesian producers. Problems in trying to maximize the impact of the IJEPA agreement on increasing domestic product product industries have encouraged Indonesia to be able to determine what products are worthy of being superior products in the context of international trade conducted with Japan. This study analyzes the trade and competitiveness of Indonesian products using Revealed Symmetric Comparative Advantage (RSCA) and Product Mapping.The results of the product mapping analysis show that there are 3 commodities that are included in the top five highest comparative advantage in 2003, 2013 and 2021, namely HS 11 commodities (Milling Industrial Products; Malt; Starch; Inulina; Wheat Gluten) HS code 21 (Extracts, essences and concentrates, from coffee, tea or mate and preparations with a basis of these products or with a basis of coffee, tea or mate) and HS code 25 (Salt; Sulfur; Soil and Stone; Plaster, Cal and Cement). This shows that these three products can be used as specialization products for Indonesia's trade with Japan.