Essay --

Aulia Akbar Ramadhan 2B3206 Walt Whitman Rostow is United Stated economist, and also a father of ecomonic theory and growth. In Rostow view through his Stages of Growth Model, there are five stages in the process of economic growth and development. The five stages are The traditional society, The precondition for take off. The take off, The drive to maturity and The age of mass consumption. In these stages Rostow point out that both of the precondition stage for take off and take off stages is very important for a country economy growth. Capital and Technology raising, is one of the most important factor for a country to achieve economic maturity for economic development. After the end of the take off stages, in general most of the economies experienced lower economic growth rates. Also at the end of the stages, the age of mass consumption, is only for country that the most people there already live in the prosperity. The country that already on these stage is mainly from West. In the case of Indonesia, Indonesia economy experience the Stage of Development when Indonesia lead by President Soeharto. Soeharto make Rostow theory as the foundation of his long term development plan. This long term plan was conducted every five years, it is called Pelita.In Pelita I which occurs between 1969-1974, Soeharto target is to raise Indonesia agricultural and food production. Based on Rostow view at this time Indonesia economy is at the traditional society stage, because many agriculture industry born in here, also people still farm with traditional way. In Pelita II 1974-1979, the growth still little, but it can bee seen that time Indonesia economy is on transtition to evolve to pre take off stage and to the take off stage. Indonesia economy f... ...untries. In indonesia case, demand side GDP is still larger than supply side GDP, this can be seen that people in Indonesia still very consumptive, also In Indonesia, the size of the domestic market have become the largest contributor to economic growth. Indonesia has relatively less affected and already immuned by the weakning of the global export market. The high consumption in Indonesia is negate by the acceleration of infrastructure, productivity, and efficiency of the national production chain in order to be not dependent on the import mechanism. There is also demand pull inflation happen. Demand pull inflation is inflation that is caused due to the increase in aggregate demand compared to the amount of goods and services offered. Because the quantity of goods demanded in Indonesia is greater than the goods offered, then there is an increasing on the price.