Abstract:
The character of ASEAN developing countries are interesting topics to examine. This is shown by the variables affecting the development of those countries and by the performance of those variables in explaining the development progress as well. The variables which are related closely with the development of developing countries are accumulated saving and Gross National Product growth in each country. Besides, the other variables which are also expectedly influencing are income per capita, dependency ratio, capital inflow to GNP ratio expected rate of inflation, real wage, growth of domestic credit and population growth.
In order to eliminate simultaneous bias, we apply TSLS method with four ASEAN countries, Indonesia, Philippine, and Thailand, as samples, in the period of 1976-1995. The result say that the two main variables are affecting each other. Furthermore, the influencing instrumental variables are income per capita, dependency ratio, capital inflow to GNP ratio, expected rate of inflation and growth of domestic credit.
