Muhammad Rafiy - Department of Economics, Faculty of Economics and Business, Universitas Halu Oleo, Kendari, Indonesia
Pasrun Adam - Department of Mathematics, Faculty of Math and Science, Universitas Halu Oleu, Kendari, Indonesia
Gamsir Bachmid - Department of Economics, Faculty of Economics and Business, Universitas Halu Oleo, Kendari ۹۳۲۳۲, Indonesia
Zainuddin Saenong - Department of Economics, Faculty of Economics and Business, Universitas Halu Oleo, Kendari, Indonesia

This study aims to examine the effect of investment and consumption spending on Indonesia’s economic growth. The data used is the quarterly time series data from the first quarter of year ۲۰۰۳ to the fourth quarter of year ۲۰۱۳, comprising consumption spending, investment and economic growth. For the purpose of analysis, the autoregressive distributed lag (ARDL) model is used. The result of the study reveals that there are long-run and short-run effects of consumption spending on economic growth. Meanwhile, the effect of investment on economic growth is not significant. The study also reveals that the increase in government spending on economic growth is ۱.۸۸% if the consumption spending rises by ۱%.

Keywords: Consumption Spending, Investment, economic growth, ARDL Model. JEL Classification: C۱۳, E۲۱۰, H۳۱, O۰۴۷