Research Paper
Year: 2021 | Month: March | Volume: 8 | Issue: 3 | Pages: 544-556
Analysis of the Causal Relationship of Economic Growth in Population and Income Inequality on the Island of Sumatra
Krisna Murty1, Sirojuzilam2, Irsad3
1Posgraduate Students Faculty of Economics and Business, Department of Economics, Universitas Sumatera Utara, Indonesia
2,3Postgraduate Lecturer Faculty of Economics and Business, Department of Economics,Universitas Sumatera Utara, Indonesia
Corresponding Author: Krisna Murty
ABSTRACT
This study aims to examine the causal relationship between economic growth, total population and income inequality. The type of data used in this research is quantitative data, while the data source used in this research is secondary data. The data used is panel data (pooled data) of 10 provinces in Sumatra during the period 2010-2019. The data analysis method used is the vector autoregression (PVAR) panel and the Granger Causality Test panel. The study found that economic growth had a negative effect on economic growth in the following year. Economic growth has a positive effect on income inequality and also has a positive effect on population. Income inequality has a negative effect on income inequality in the following year. Income inequality has a positive and negative effect on economic growth, income inequality also has a positive and negative effect on population. The total population in a certain year period has a negative effect on the population of the following year. Total population has a positive effect on economic growth and has a negative effect on income inequality. The results of the granger causality test panel found a one-way relationship (unidirectional causality) of total population to economic growth.
Keywords: Economic Growth, Total Population, Income Inequality, Panel Vector Autoregression P(VAR) and Granger Causality Test.
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