An economic growth model based on financial credits distribution to the government economy priority sectors of each regency in Indonesia using hierarchical Bayesian method

Septia Devi Prihastuti Yasmirullah*, Nur Iriawan, Feronika Rosalinda Sipayung

*Corresponding author for this work

Research output: Chapter in Book/Report/Conference proceedingConference contributionpeer-review

Abstract

The success of regional economic establishment could be measured by economic growth. Since the Act No. 32 of 2004 has been implemented, unbalance economic among the regency in Indonesia is increasing. This condition is contrary different with the government goal to build society welfare through the economic activity development in each region. This research aims to examine economic growth through the distribution of bank credits to each Indonesia's regency. The data analyzed in this research is hierarchically structured data which follow normal distribution in first level. Two modeling approaches are employed in this research, a global-one level Bayesian approach and two-level hierarchical Bayesian approach. The result shows that hierarchical Bayesian has succeeded to demonstrate a better estimation than a global-one level Bayesian. It proves that the different economic growth in each province is significantly influenced by the variations of micro level characteristics in each province. These variations are significantly affected by cities and province characteristics in second level.

Original languageEnglish
Title of host publicationProceedings of the 13th IMT-GT International Conference on Mathematics, Statistics and their Applications, ICMSA 2017
EditorsHaslinda Ibrahim, Nazrina Aziz, Mohd Kamal Mohd Nawawi, Azizah Mohd Rohni, Jafri Zulkepli
PublisherAmerican Institute of Physics Inc.
ISBN (Electronic)9780735415959
DOIs
Publication statusPublished - 22 Nov 2017
Event13th IMT-GT International Conference on Mathematics, Statistics and their Applications, ICMSA 2017 - Kedah, Malaysia
Duration: 4 Dec 20177 Dec 2017

Publication series

NameAIP Conference Proceedings
Volume1905
ISSN (Print)0094-243X
ISSN (Electronic)1551-7616

Conference

Conference13th IMT-GT International Conference on Mathematics, Statistics and their Applications, ICMSA 2017
Country/TerritoryMalaysia
CityKedah
Period4/12/177/12/17

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