Forecasting the contribution of renewable energy to the Indonesian economy: A vector error correction model approach

Ramadhan, Muhammad Rafenza, Aprilianti, Natasya, Fadil, Nadila Istima and Wicaksono, Ahmad Tibrizi Soni ORCID: https://orcid.org/0000-0001-8643-1351 (2024) Forecasting the contribution of renewable energy to the Indonesian economy: A vector error correction model approach. International Journal of Business and Applied Economics, 3 (6). pp. 1021-1038. ISSN 2963-6124

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Abstract

This study aims to evaluate the causal relationship between Renewable Energy Consumption, Non-Renewable Energy Consumption, and Economic Growth. This study uses quantitative methods and analyzes data using a Granger Causality Test, Vector Error Correction Model (VECM), Impulse Response Function (IRF), and Variance Decomposition (VDC). The study was conducted in Indonesia, with data ranging from 1993 to 2022 obtained from the World Bank database and Our World in Data. The results of the study based on the Granger test show that renewable energy has a significantly positive impact on economic growth in Indonesia. According to the VECM test, renewable energy consumption contributes to increasing economic growth as a result of construction and manufacturing sector activities in the development of renewable energy in Indonesia. The government should focus on energy availability, with an emphasis on increasing the production of renewable natural resources.

Item Type:	Journal Article
Keywords:	Economic Growth; Renewable Energy Consumption; Non-Renewable Energy Consumption; Forecast
Subjects:	14 ECONOMICS > 1402 Applied Economics > 140202 Economic Development and Growth 14 ECONOMICS > 1402 Applied Economics > 140205 Environment and Resource Economics 14 ECONOMICS > 1403 Econometrics > 140303 Economic Models and Forecasting
Divisions:	Faculty of Economics > Department of Islamic Banking
Depositing User:	Ahmad Tibrizi Soni Wicaksono
Date Deposited:	18 Nov 2024 14:36

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