Two Layer Feedback Loop Structure of The Regional Economies of Indonesia: An Interregional Block Structural Path Analysis

Abstract

This paper examines the structure of interregional dependency in a five-region division of The Indonesian Economy for 1995. An Interregional social accounting matrix was constructed with direct interregional flows limited to those of the production accounts. An interregional version of Block Structural Path Analysis was applied to construct the chains of dependency resulting from injections in selected accounts in each region in turn. The result revealed once again the continuation of the asymmetry between the dependencies between Jawa and Sumatera on the one hand and these two regions and the remaining three regions in the country. While significant interregional leackages existed from changes in levels of activity in the eastern part of the country, the reverse was not the case when change was initiated in Jawa or Sumatera.


Nuzul Achjar
Geoffrey J.D. Hewings
Michael Sonis

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