Natural Disasters and Economic Growth in Indonesia

Authors

  • Ghalieb Mutig Idroes Economic Modeling and Data Analytics Unit, Graha Primera Saintifika, Aceh Besar 23371, Indonesia
  • Irsan Hardi Economic Modeling and Data Analytics Unit, Graha Primera Saintifika, Aceh Besar 23371, Indonesia
  • Muhammad Nasir Department of Economics, Faculty of Economics and Business, Universitas Syiah Kuala, Banda Aceh 23111, Indonesia
  • Eddy Gunawan Department of Economics, Faculty of Economics and Business, Universitas Syiah Kuala, Banda Aceh 23111, Indonesia
  • Putri Maulidar Department of Economics Development, Faculty of Economics and Business, Universitas Syiah Kuala, Banda Aceh 23111, Indonesia
  • Ar Razy Ridha Maulana Statistics of Aceh Province, Banda Aceh 23121, Indonesia

DOI:

https://doi.org/10.60084/eje.v1i1.55

Keywords:

Economic growth, Natural disasters, FMOLS, DOLS, CCR, VECM, Indonesia

Abstract

Natural disasters can have a profound impact on a country's economic growth, making it crucial for policymakers to understand the relationship between natural disasters and economic growth in order to develop effective strategies that mitigate adverse effects and promote sustainable development. The study utilizes secondary data spanning from 1990 to 2021 and employs the Fully-Modified Ordinary Least Squares (FMOLS), Dynamic Ordinary Least Squares (DOLS), Canonical Co-Integrating Regression (CCR), and Vector Error Correction Model (VECM) methods. The study's findings provide valuable insights into the substantial effects of natural disasters on economic growth, indicating a positive long-term impact. Furthermore, the analysis highlights a unidirectional causality, illustrating the notable influence of natural disasters on the country's economic performance. Policymakers should prioritize investments in upgrading and retrofitting infrastructure, focusing on key sectors like transportation, energy, water, and telecommunications, to mitigate the adverse effects of natural disasters and promote sustainable economic growth.

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Published

2023-07-11

How to Cite

Idroes, G. M., Hardi, I., Nasir, M., Gunawan, E., Maulidar, P. and Maulana, A. R. R. (2023) “Natural Disasters and Economic Growth in Indonesia”, Ekonomikalia Journal of Economics, 1(1), pp. 33–39. doi: 10.60084/eje.v1i1.55.

Issue

Vol. 1 No. 1 (2023): July 2023

Section

Articles

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Copyright (c) 2023 Ghalieb Mutig Idroes, Irsan Hardi, Muhammad Nasir, Eddy Gunawan, Putri Maulidar, Ar Razy Ridha Maulana

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This work is licensed under a Creative Commons Attribution-NonCommercial 4.0 International License.