Macroeconomics, human development and political stability: evidence from OIC countries

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Published: Oct 31, 2023
DOI: https://doi.org/10.18196/jesp.v24i2.19509
Keywords:
HDI, Inflation, Unemployment, Trade Openness, Foreign Direct Investment, Political Stability

Main Article Content

Izzatu Dzihny
Department of Islamic Economics, Faculty of Islamic Economics and Bussiness, Universitas Islam Negeri Sunan Kalijaga, Special Region of Yogyakarta
https://orcid.org/0000-0001-7421-6531
Muhammad Ghafur Wibowo
Department of Islamic Economics, Faculty of Islamic Economics and Bussiness, Universitas Islam Negeri Sunan Kalijaga, Special Region of Yogyakarta
Akmal Ihsan
Department of Islamic Economics, Faculty of Islamic Economics and Bussiness, Universitas Islam Negeri Sunan Kalijaga, Special Region of Yogyakarta

Abstract

This study aims to examine and analyze the effect of macroeconomic variables on the Human Development Index (HDI) in the Organisation of Islamic Cooperation (OIC) countries with political stability as the moderating variable. The GMM (Generalized Method Moment) dynamic panel and the MRA (Moderated Regression Analysis) will be used for determining the type of moderation needed as analysis techniques. In the first section, the findings state that inflation and unemployment have no effect on HDI, This is due to the fact that inflation and unemployment are very dependent on global economic fluctuation. Meanwhile, trade openness has a significant positive effect on HDI and foreign direct investment has a significant negative effect on HDI. This can add to the evidence that a high level of trade openness can support HDI values in OIC countries. Trade Openness can strengthen the economy, education, and health simultaneously by increasing prosperity through increased demand, supply, and services in numerous sectors. Secondly, the value of the moderator variable (political stability) on the relationship between unemployment and HDI demonstrates that political stability acts as a "Quasi Moderator" which means that political instability can exacerbate the negative influence of unemployment on HDI in OIC countries. This research has implications for the importance of cooperation between OIC countries in various fields, especially in increasing trade, investment, job creation and good governance to support the expansion of human development in OIC nations and to build sustainable prosperity.

Article Details

How to Cite
Dzihny, I., Wibowo, M. G., & Ihsan, A. (2023). Macroeconomics, human development and political stability: evidence from OIC countries. Jurnal Ekonomi &Amp; Studi Pembangunan, 24(2), 390–411. https://doi.org/10.18196/jesp.v24i2.19509
Issue
Vol. 24 No. 2: October 2023
Section
Articles

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