The Impact of Household Consumption and Investment on Economic Growth

Abstract

In real economic activity, economic growth is the financial development of goods and services sold by the state, such as increased production of industrial goods, infrastructure development, increased number of schools, increased production of goods. services, and increased production of capital goods. This study aims to determine the effect of household consumption and investment on Indonesia's economic growth. This is a quantitative study and uses Indonesian data. This quantitative research uses the Ordinary Least Square (OLS) method and secondary data in the form of time series data collected by BPS (Central Bureau of Statistics). This study was analyzed using a multiple linear regression analysis model conducted with SPSS version 21 software. The variable of this research is economic growth in terms of GDP at constant prices, based on usage, household consumption and investment in Indonesia. The results showed that (1) household consumption had a significant negative effect on Indonesia's economic growth, (2) investment had a significant positive effect on Indonesia's economic growth, and (3) simultaneously household consumption and investment had a significant positive effect on Indonesia's economic growth.