The Analysis Of Circular Causation On Productive Sectors In Indonesia (1984 -2004)

Abstract

Economic growth is usually measured by Gross Domestic Product (GDP). Based on output approach, the total output of GDP comprises of economic sectoral output. Among those economic sectors interdependency might occur. This might happen because economic sectors can not produce in isolation, they need to cooperate with each other. Example of this cooperation among sectors is that an output from a sector could be an input to another sector. This research observes the existence of intersectoral relationship among GDP sectors and investigates the connection between those sectors to overall employment. This research also examines the change happen to productive sectors due to different economic situation (before and after economic crisis) occurred in Indonesia. Productive sector is similar with real sector. This research uses statistical and econometrical approach. The simple log linear model is used to exercise the model. This research has managed to find out that not all sectors have correlation to other sectors. There are some sectors that do not correlate with other sectors and the contribution does not always imply positive, there is also negative effect. Afterward, there is one GDP sector which has correlation to employment sector. And finally, after economic crisis there is only one sector which feels better learning process.