Poverty, Debt Trap, and The Economy in Indonesia

English

Abstract

We conducted research on the impact of poverty in Indonesia on economic growth and debt.
The secondary data that we use comes from the World Bank and covers a period of 30 years,
from 1990 to 2020. We analyze the data using an autoregressive vector model. We also use
vector calculations to test the dependent and independent variables. To derive the zero value
from the Dickey-Fuller definition, we use PP analysis. Our research results show that
economic growth can reduce debt and poverty. Conversely, poverty can increase debt and
reduce economic growth in Indonesia. Poverty is very detrimental to the Indonesian
economy because it causes debt to increase and economic growth to decrease. Economic
growth is very important for Indonesia because it can create new jobs to reduce the rate of
debt growth and reduce poverty