Forecasting the potential output and growth of the manufacturing industry: a case study of Indonesia's manufacturing sector
Indonesia is currently experiencing deindustrialization, characterized by a manufacturing industrial sector growth rate lower than the overall economic growth rate. Therefore, it is necessary to encourage the development of the industrial sector to achieve sustainable development. The scenario for i...
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| Format: | Article |
| Language: | English |
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Universitas Muhammadiyah Yogyakarta
2024-01-01
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| Series: | Jurnal Ekonomi & Studi Pembangunan |
| Subjects: | |
| Online Access: | https://journal.umy.ac.id/index.php/esp/article/view/18716 |
| _version_ | 1827300467337592832 |
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| author | Tirta Wisnu Permana Gatot Yudoko Eko Agus Prasetio |
| author_facet | Tirta Wisnu Permana Gatot Yudoko Eko Agus Prasetio |
| author_sort | Tirta Wisnu Permana |
| collection | DOAJ |
| description | Indonesia is currently experiencing deindustrialization, characterized by a manufacturing industrial sector growth rate lower than the overall economic growth rate. Therefore, it is necessary to encourage the development of the industrial sector to achieve sustainable development. The scenario for industrial development policy is determined based on an evaluation of the country's economic position in relation to current business cycle conditions. The evaluation is carried out through output gap analysis, which refers to the gap between actual and potential output. The research aim is to analyze output potential estimates and gaps in the Indonesian non-oil and gas processing industry sector. The methodology used in this research includes the HP Filter (Hodrick-Prescott), BP Filter (Band-Pass), and the Production Function Approach. The findings show that Indonesia's non-oil and gas processing industry experienced a slight decline below its potential between 2020 and 2021. Therefore, policymakers must consider this; in the short term, inflationary pressures are caused by a positive output gap, so the government needs to prioritize efforts to control inflation. Meanwhile, medium-term structural reforms must continue to increase potential output, including increasing labor force participation, sustainable investment for capital factors, and improving the quality of human resources and technological expertise for productivity factors. In particular, it is necessary to pay attention to the adoption of new emerging technologies. |
| first_indexed | 2024-04-24T16:04:03Z |
| format | Article |
| id | doaj.art-7a1a9856e39a487f83149f3362cd4a04 |
| institution | Directory Open Access Journal |
| issn | 1411-9900 2541-5506 |
| language | English |
| last_indexed | 2024-04-24T16:04:03Z |
| publishDate | 2024-01-01 |
| publisher | Universitas Muhammadiyah Yogyakarta |
| record_format | Article |
| series | Jurnal Ekonomi & Studi Pembangunan |
| spelling | doaj.art-7a1a9856e39a487f83149f3362cd4a042024-04-01T05:57:10ZengUniversitas Muhammadiyah YogyakartaJurnal Ekonomi & Studi Pembangunan1411-99002541-55062024-01-0124236838910.18196/jesp.v24i2.187167220Forecasting the potential output and growth of the manufacturing industry: a case study of Indonesia's manufacturing sectorTirta Wisnu Permana0Gatot Yudoko1Eko Agus Prasetio2School of Business and Management, Institut Teknologi Bandung, West JavaSchool of Business and Management, Institut Teknologi Bandung, West JavaSchool of Business and Management, Institut Teknologi Bandung, West JavaIndonesia is currently experiencing deindustrialization, characterized by a manufacturing industrial sector growth rate lower than the overall economic growth rate. Therefore, it is necessary to encourage the development of the industrial sector to achieve sustainable development. The scenario for industrial development policy is determined based on an evaluation of the country's economic position in relation to current business cycle conditions. The evaluation is carried out through output gap analysis, which refers to the gap between actual and potential output. The research aim is to analyze output potential estimates and gaps in the Indonesian non-oil and gas processing industry sector. The methodology used in this research includes the HP Filter (Hodrick-Prescott), BP Filter (Band-Pass), and the Production Function Approach. The findings show that Indonesia's non-oil and gas processing industry experienced a slight decline below its potential between 2020 and 2021. Therefore, policymakers must consider this; in the short term, inflationary pressures are caused by a positive output gap, so the government needs to prioritize efforts to control inflation. Meanwhile, medium-term structural reforms must continue to increase potential output, including increasing labor force participation, sustainable investment for capital factors, and improving the quality of human resources and technological expertise for productivity factors. In particular, it is necessary to pay attention to the adoption of new emerging technologies.https://journal.umy.ac.id/index.php/esp/article/view/18716indonesiaoutput gapshp filterbp filtermanufacturing industry |
| spellingShingle | Tirta Wisnu Permana Gatot Yudoko Eko Agus Prasetio Forecasting the potential output and growth of the manufacturing industry: a case study of Indonesia's manufacturing sector Jurnal Ekonomi & Studi Pembangunan indonesia output gaps hp filter bp filter manufacturing industry |
| title | Forecasting the potential output and growth of the manufacturing industry: a case study of Indonesia's manufacturing sector |
| title_full | Forecasting the potential output and growth of the manufacturing industry: a case study of Indonesia's manufacturing sector |
| title_fullStr | Forecasting the potential output and growth of the manufacturing industry: a case study of Indonesia's manufacturing sector |
| title_full_unstemmed | Forecasting the potential output and growth of the manufacturing industry: a case study of Indonesia's manufacturing sector |
| title_short | Forecasting the potential output and growth of the manufacturing industry: a case study of Indonesia's manufacturing sector |
| title_sort | forecasting the potential output and growth of the manufacturing industry a case study of indonesia s manufacturing sector |
| topic | indonesia output gaps hp filter bp filter manufacturing industry |
| url | https://journal.umy.ac.id/index.php/esp/article/view/18716 |
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