Indonesia economic growth determinants: Generalized method of moments (Gmm) model approachment

• Noviana Yusuf, Raja Masbar, Aliasuddin Fakultas Ekonomi dan Bisnis, Universitas Syiah Kuala, Banda Aceh, Indonesia

Abstract

This study aimed to analyze the determinants of economic growth in Indonesia by using time series data from the 1986-2017 and Generalized Method of Moments (GMM) model as a method. The results showed that government spending has a positive and significant effect on economic growth. However, employment and education have a negative and significant effect on economic growth. In conclusion, the government must improve the education in order to increase labor productivity, hence optimal economic growth can be achieved