Jakarta: Central Statistic Bureauīaltagi, B. Ekonomi Pembangunan (Development Economic), Yogyakarta: STIE YKPN.īadan Pusat Statistik (Central Statistic Bureau). Based on these findings, the government and related parties should encourage investment in basic infrastructure and transportation to improve economic performance sustainably. Thus, infrastructure development, especially basic infrastructure and transportation, could reduce income inequality in Indonesia. These findings demonstrate that infrastructure indirectly reduces income inequality. The results reveal that infrastructure had a positive effect on economic growth, whereas direct economic growth harmed income inequality. The analytical methods applied here include descriptive method along with a two-step regression analysis method. The present study used the Gini Ratio, Gross Regional Domestic Product (GRDP) data at constant market prices, investment, number of workforces, percentage of poor population, distribution of clean water, electricity distribution, and road length as of 2010-2016. This study aims to analyze the direct effect of infrastructure development on economic growth and the indirect effect - on income inequality. Those debates raised the question of "is there a role for infrastructure development in economic growth which in turn encourages a decline in income inequality?". The relationship between infrastructure development, economic growth, and income inequality has always been debated.
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