EFFECTS OF INTERNATIONAL TOURISM REVENUE, TRADE OPENNESS, FORMATION OF PHYSICAL CAPITAL, AND CONSUMER PRICE INDEX ON INDONESIA'S GROSS DOMESTIC PRODUCT

Tourism is one of the factors that is thought to influence the Gross Domestic Product (GDP) of a country, including Indonesia. This study aimed to find out the direction of the relationship between the variables of International Tourism Acceptance and Gross Domestic Product in Indonesia using the Granger Causality Test. In addition, this study also sought to investigate the long-term relationship and influence of the variables of International Tourism Revenue, Trade Openness, Formation of Physical Capital, and Consumer Price Index on Gross Domestic Product in Indonesia. This study used the Johansen Cointegration Test and Vector Error Correction Model (VECM). The data used were annual time series data from 1986-2015 from the Central Bureau of Statistics, International Financial Statistics, World Bank, Bank Indonesia, and the Ministry of Tourism. The results of this study indicated that there was a unidirectional causality of International Tourism Revenue of Gross Domestic Product in Indonesia. In addition, there were long-term relationships between independent and dependent variables. Based on the VECM estimation results, the variables that proved to be statistically significant in influencing Gross Domestic Product were International Tourism Revenue, Physical Mode Formation, and Consumer Price Index. International Tourism Revenue has been proven to have a significant effect on the Gross Domestic Product in the long run