Sebelas Maret International Conferences, The 1st INCREDIBLE

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AN EMPIRICAL EVIDENCE OF ECONOMIC GROWTH DURING COVID-19 PANDEMIC IN INDONESIA
Vita Kartika Sari, Malik Cahyadin

Building: Parallel Session 1
Room: E
Date: 2020-10-27 01:15 PM – 02:30 PM
Last modified: 2020-10-19

Abstract


The study attempts to estimate Solow Growth Model during COVID-19 Pandemic in Indonesia. There are about 68 observations cover 34 provinces and 2020:q1 – 2020:q2 period. Static panel data was employed. The findings exhibit that fixed effects model is more appropriate than random effects model and pooled OLS. Fixed effects model expresses that Solow Growth Model does not exist during COVID-19 Pandemic. In contrast, random effects model and pooled OLS confirm that ICT, number of COVID-19 and inflation have significant and a positive impact on economic growth. It means that ICT usage, number of COVID-19 and inflation rate lead higher level of economic growth in Indonesia. Indeed, the central and local government should facilitate the availability and accessibility of ICT. However, the governments should control number of COVID-19 and inflation in the long-run.

Keywords: economic growth, COVID-19, inflation, Solow Growth Model