DETERMINATION OF INDONESIA’S ECONOMIC GROWTH

Abstract

This study examines the dynamic relationship between agricultural exports, export taxes, inflation, and school participation rates on Indonesia’s economic growth from 1994 to 2024, addressing previous inconsistencies in empirical findings. Using the Autoregressive Distributed Lag (ARDL) model, the analysis incorporates stationarity, cointegration, and stability tests to ensure reliability. Results indicate that, in the short run, all variables—agricultural exports, export taxes, inflation, and education participation—positively and significantly influence economic growth. However, in the long run, only agricultural exports maintain a positive and significant impact, while export taxes, inflation, and school participation rates exert negative and significant effects. These findings reveal the dual role of fiscal, monetary, and educational factors: although they may stimulate growth in the short term, they can constrain long-term development if not complemented by structural improvements. The study emphasizes that enhancing agricultural export competitiveness, reviewing export tax policies, maintaining price stability, and prioritizing quality improvements in education are crucial strategies for sustaining Indonesia’s economic growth. Overall, the research highlights the need for balanced policies that integrate agricultural, fiscal, and educational dimensions to achieve inclusive and sustainable development.