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Economic Growth and Poverty Reduction in Indonesia Before and After the Asian Financial Crisis
This paper assesses the relationship between economic growth and poverty reduction in
Indonesia before and after the Asian financial crisis (AFC). Indonesia has a significantly
slower poverty reduction post-AFC compared to the pre-AFC era. The trend in the growth
elasticity of poverty indicates that the power of each% of economic growth to reduce poverty
did not change greatly between the pre and post-AFC time periods. During both these
periods, the growth of services sector is the largest contributor to poverty reduction in both
rural and urban areas.
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