Islamic Economic Indicator and Poverty Problem: Case Study in Indonesia

Abstract

Poverty has a close relationship with index quality of life, forming a vicious circle of poverty regarding material and non-material aspects. In addition, macroeconomic factors cause and are caused by poverty, such as investment and inflation. This study tries to see how the interaction between macro and religious indicators exists in Indonesia and the problem of poverty in provinces in Indonesia. The research method used the panel vector error correction model (PVECM) in the long-term and shortterm interaction, which showed that in long-term indicator I-HDI, investment and inflation don't affect the Indonesian poverty rate. The rate of independent indicators can't be a strategy for alleviating poverty in Indonesia. Unlike the long term, in the short term I-HDI, investment and inflation negatively impacted Indonesia's poverty alleviation.