Analysis of Endogeneity in Green Growth, Foreign Debt, and Aging Population: A Comparison of Indonesia and Malaysia

This study aims to test the endogeneity among green growth, foreign debt, and aging population for Indonesia and Malaysia using a vector autoregression approach from 1975 to 2023. This study can provide important insights into how economic and demographic factors interact in the context of green growth and foreign debt, as well as offer more informed policy recommendations for both countries. Endogeneity analysis in this context will help design more effective and adaptive policies to address global and local economic dynamics toward achieving sustainable development goals. The key findings of this study indicate similar results in both countries, showing causality between the aging population and foreign debt. Furthermore, there is a one-way relationship where only green growth affects foreign debt. Additionally, there are divergent findings between the two countries: green growth and aging population do not influence each other in Indonesia, whereas in Malaysia, it is only aging population that affects green growth. Recommendations from this study suggest that both countries need to promote sustainable health for aging populations through the development of productive investments and risk management in the use of foreign debt.