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This paper employs vector autoregressive (VAR) models to measure the impact of monetary policy shocks on regional output in Indonesia. We find substantial cross‐regional variation in policy responses in terms of both magnitude as well as timing. Our work adds to the existing literature by providing insights from a large developing country, viz. Indonesia, where monetary policy has both a national and a regional dimension. The results support previous findings that the differential regional effects of monetary policy are significantly related to sectoral composition (especially the share of manufacturing), providing evidence for the relevance of the interest rate channel of monetary policy. We also find that firm size contributes to these differences, providing evidence for the importance of the credit channel. As a whole, both types of channels appear to operate simultaneously in the decentralized Indonesian monetary policy and to impact on the real part of the regional economy.

The main objective of this study is to examine the effect of health on economic growth based on 719 estimates obtained from 64 studies from all over the world. We find evidence of a publication bias towards a positive estimated effect of health on economic growth. After accounting for heterogeneity of the estimates, we show that health has a genuine positive effect on economic growth. Less developed countries seem to enjoy a higher effect of health on growth driven by the ongoing economic–demographic transition in those countries. The variation of the health effect on economic growth is also influenced by the available data, estimation procedure, model specification, publication channel, and country characteristics in each study. Studies that do not account for endogeneity seem to create an upward bias. Studies with more comprehensive variables seem to increase the estimated effect of health on growth. A higher number of years of compulsory education, longer working experience, and more favourable environmental conditions also increase the effect size. Overall, our results confirm the key role of the health factor in explaining economic growth across countries.

This paper aims to examine sources of labor wage differentials and to investigate human capital externalities across Indonesian districts. Our study attempts to fill the gap in the standard literature, which mainly asserts the key role of labor market characteristics in explaining the disparities. Based on microdata on individual workers from 2006-2015, we found that not only individual (labor) characteristics play a role in explaining the wage variations, but also regional endowments and agglomeration forces. The latter mainly results from spatial proximity of firms to other firms, from labor market pooling, and from knowledge spillovers. In addition, we also found strong evidence of positive human capital externalities, particularly in agglomerated regions. All in all, these findings may suggest the importance of skills and agglomeration for policymakers in boosting local productivity vis-à-vis reducing income/wage inequality.

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