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Population and economic development in Indonesia: A revisit with new data and methods

Author

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  • Fumitaka Furuoka

    (University of Malaya, Asia-Europe Institute, 50603 Kuala Lumpur, Malaysia)

Abstract

The long-term relationship between population and economic development is an important research topic in development economics. However, after several decades of research, no consensus has been reached as to whether the relationship is positive or negative. This paper chose Indonesia as a case study and employed both a linear cointegration test and a nonlinear cointegration test to examine the relationship between population and income. The tests detected a long-run equilibrium relationship between population and real per capita income in Indonesia. Also, the causality test indicated that there existed a unidirectional causality from Indonesia’s population expansion to the country’s economic growth, but not vice versa. These results indicate a population-driven economic development in Indonesia. In other words, Indonesia could represent a textbook case of population-induced development where a rapid population growth stimulates economic development.

Suggested Citation

  • Fumitaka Furuoka, 2013. "Population and economic development in Indonesia: A revisit with new data and methods," Acta Oeconomica, Akadémiai Kiadó, Hungary, vol. 63(4), pages 451-467, December.
    • Handle: RePEc:aka:aoecon:v:63:y:2013:i:4:p:451-467
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    Citations

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    Cited by:

    1. Furuoka, Fumitaka, 2014. "Population and economic development in Sarawak, Malaysia," MPRA Paper 60636, University Library of Munich, Germany.
    2. Silvia London & Gastón Cayssials & Fernando Antonio Ignacio González, 2022. "Population growth and economic growth: a panel causality analysis," Asociación Argentina de Economía Política: Working Papers 4574, Asociación Argentina de Economía Política.
    3. ČERMÁKOVÁ Klára & MEC Michal, 2024. "Population Growth and GDP Per Capita Growth: Identifying the Causal Variable in 30 African Countries," European Journal of Interdisciplinary Studies, Bucharest Economic Academy, issue 01, March.
    4. Chen Kong San & Lee Chin, 2023. "Impact of Public Debt on Economic Growth: A Quantile Regression Approach," South Asian Journal of Macroeconomics and Public Finance, , vol. 12(2), pages 250-278, December.
    5. Alvarez-Dias, Marcos & D'Hombres, Beatrice & Ghisetti, Claudia & Pontarollo, Nicola & Dijkstra, Lewis, 2018. "The Determinants of Population Growth: Literature review and empirical analysis," JRC Working Papers in Economics and Finance 2018-10, Joint Research Centre, European Commission.
    6. Jorge Garza-Rodriguez & Cecilia I. Andrade-Velasco & Karen D. Martinez-Silva & Francisco D. Renteria-Rodriguez & Pedro A. Vallejo-Castillo, 2016. "The relationship between population growth and economic growth in Mexico," Economics Bulletin, AccessEcon, vol. 36(1), pages 97-107.
    7. Fumitaka Furuoka, 2018. "Is population beneficial to economic growth? An empirical study of China," Quality & Quantity: International Journal of Methodology, Springer, vol. 52(1), pages 209-225, January.

    More about this item

    Keywords

    population; economic development; cointegration test; Indonesia;
    All these keywords.

    JEL classification:

    • J1 - Labor and Demographic Economics - - Demographic Economics
    • O1 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development

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