ANALISIS PENGARUH PENGELUARAN PEMERINTAH PADA SEKTOR PUBLIK TERHADAP PERTUMBUHAN EKONOMI DI 35 KABUPATEN/KOTA JAWA TENGAH PERIODE 2004-2007

Abstract

ABSTRACT Government expenditure in public sector has done because the private sectors averse to stock their capitalsfor public goods. Central Java consist of 35 Regency/City for periods research (2004-2007) have structure of government expenditure which inclined increase for each year but it was notfollowed with increasing of economic growth during its periods. Economic growth in that periods inclined in fluctuation. Based on the theory, increasing of government expenditure will increase the regional income. Regional income or GDRP creates economic growth. According to endogenous growth theory, economic growth depended on government expenditure . The purpose of this research are to asses empirically the effect of government expenditure in public sector on economic growth in 35 Regency/City during 2004-2007. This research adopted the model which has used by Mesghena Yasin (2002) and Siti Aisyah Tri Rahayu (2004). Variable is used in this research consist of growth rate (GR) as dependent variable, and independent variable are government expenditure for investment ratio (GIR), and government expenditure for consumption ratio (GCR). For the purposes, this research uses panel data from several source . The model which uses in this research is fixed effect model and estimated with crossection weight. The results indicate that government expenditure in public sectors show the positive relation and significant on economic growth. Government expenditure for consumption shows the positive relation and significant on economic growth So, the role ofgovernment in each ofeconomy regional is very important. Keywords: economic growth, government expenditure, public sector