Application of the Bourguignon Model to the Economy of Central Sulawesi, Indonesia
Journal Title: Journal of Economics, Finance and Management Studies - Year 2025, Vol 8, Issue 05
Abstract
This study examined the factors influencing economic growth in Central Sulawesi using François Bourguignon’s PGI Triangle theory (Poverty, Growth, and Inequality). Despite high economic growth, persistent poverty, inequality, and unemployment indicated developmental imbalances. The research highlighted an anomaly where rapid growth coexisted with severe socio-economic disparities. The study introduced a novelty approach by modifying Bourguignon’s model to include unemployment (Okum's law) and applying the Lagged Adjustment Growth (LAG) framework to assess delayed effects. Using panel data from 12 districts and 1 city between 2016 and 2021, the Random Effect Model (REM) was selected based on Chow, Hausman, and Lagrange Multiplier tests. The findings revealed that inequality and unemployment significantly hindered economic growth, while Gross Domestic Regional Product (GDRP) had a positive effect. Poverty, however, exhibited a negative but statistically insignificant relationship with growth. These results underscore the need for inclusive growth policies to reduce inequality and foster sustainable development.
Authors and Affiliations
Farida Millias Tuty, Chairil Anwar , Moh. Ahlis Djirimu,
Keywords
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- EP ID EP766310
- DOI 10.47191/jefms/v8-i5-27
- Views 12
- Downloads 0
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