COINTEGRATION ANALYSIS OF ECONOMIC GROWTH AND HUMAN DEVELOPMENT INDEX OF DISTRICTS IN CENTRAL JAVA

Abstract

The level of quality human development will be able to compete in the Global era, and even has the potential to achieve development goals, are towards prosperity. The purpose of this study was to determine the longterm relationship between economic growth and the Human Development Index (HDI) of regencies / cities in Central Java during the period 2004 2013. This study used panel data, using the Klassen Typology method to see regional classification and cointegration test to see long-term relationships. The results show that by using the Klassen Typology there are 14 regencies / cities included in the category of fast-developed and fast-growing regions (Quadrant I), 6 of which are urban areas. In quadrant II or fast developing areas there are 10 regencies, 4 developed but depressed regencies (Quadrant III) and 7 regencies which are relatively underdeveloped (Quadrant IV). Meanwhile, the results of the cointegration test show that there is a long-term balance relationship between economic growth and the Human Development Index (HDI). The commitment to carry out the mandate of the law is important to realize this balance. Keyword: Economic growth, Human Development Index, Cointegration, Klassen Tipology