Economic freedom and growth dynamics in Indonesia: an empirical analysis of indicators driving sustainable development
This study investigates the contributions of economic freedom indicators to Indonesia’s economic growth from 1995 to 2022, applying the Solow growth model within both static and dynamic frameworks. Using Robust Least Squares (RLS) and dynamic methods – such as Dynamic Ordinary Least Squares (DOLS) a...
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| Main Authors: | , , , , , |
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| Format: | Article |
| Language: | English |
| Published: |
Taylor & Francis Group
2024-12-01
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| Series: | Cogent Economics & Finance |
| Subjects: | |
| Online Access: | https://www.tandfonline.com/doi/10.1080/23322039.2024.2433023 |
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| Summary: | This study investigates the contributions of economic freedom indicators to Indonesia’s economic growth from 1995 to 2022, applying the Solow growth model within both static and dynamic frameworks. Using Robust Least Squares (RLS) and dynamic methods – such as Dynamic Ordinary Least Squares (DOLS) and Fully Modified Ordinary Least Squares (FMOLS) – and conducting robustness checks with Canonical Cointegration Regression (CCR), the analysis confirms that eight out of nine indicators – particularly business freedom, monetary freedom, trade freedom, property rights, government integrity, tax burden, investment freedom, and financial freedom – positively influence Indonesia’s economic growth. These findings underscore the importance of policies that enhance property rights, minimize government intervention, promote investment, and encourage competitive markets. The study’s insights aim to guide Indonesian policymakers in leveraging economic freedom to foster sustainable, long-term growth. |
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| ISSN: | 2332-2039 |