HUBUNGAN KAUSAL ANTARA KEDATANGAN WISATAWAN MANCANEGARA DAN PERTUMBUHAN EKONOMI: BUKTI DARI INDONESIA

ABSTRACK MUHAMAD RIFKI FADILAH. The Causal Relationship between Tourist Arrivals and Economic Growth: Evidence from Indonesia. Economics Education, Faculty of Economics, State University of Jakarta, 2018. This paper aims at investigating whether foreign tourist arrivals contribute to economic growth evidence from Indonesia over the period 2004 (1) – 2016 (12). The main motivation behind this research because nowadays tourism becomes as the one of major industries in Indonesia. As recorded by Ministry of Tourism in the end of 2014, tourism was able to contribute 461.36 trillion rupiah or 4.23% of Indonesia's gross domestic product (GDP). Then, this research was applied the vector autoregressive (VAR) model. Afterwards, this paper exploited Hodrick-Prescott de-trending procedure to obtain cyclical components of tourist arrivals and economic growth. By using the test of granger-causality, this paper found that causality running from tourist arrivals to economic growth. Futhermore, the VAR model shows that tourist arrivals were pro-cyclical to economic growth, implied that the increase of tourist arrivals promote the economic growth, it seems that foreign tourist arrivals could be the key to escalate Indonesia’s economic growth in short term. Keywords: tourist arrivals, economic growth, cyclicality, VA