A Comprehensive Model of Reducing Poverty
Ima Amaliah, Tasya Aspiranti, Westi Riani

Ima Amaliah
Economics Departemen, Economic and Busines Faculty
Tasya Aspiranti
Management Departemen, Economic and Business Faculty
Westi Riani
Economics Departement, Economic and Business Faculty
Bandung Islamic University
Tamansari Street No. 24-26 West Java-Indonesia

Abstract

The research investigates a comprehensive poverty model by including the variables of financial inclusion, economic growth, and inequality together in the model. This study uses Java Island, Indonesia, with an annual time series from 2000 to 2019. The Vector Error Correction Model (VECM) method estimates short-term and long-term phenomena from the model. The results showed that poverty was influenced by financial inclusion and income inequality in the short term. In contrast, in the long term, poverty was influenced by financial inclusion and economic growth. In the long term, poverty reduction can be achieved through financial development that facilitates financial services for the poor that can increase per capita income

Keywords: Financial Inclusion, Economic Growth, Income Inequality, Poverty Introduction

Topic: Economic Welfare in Terms of Islamic Perspective