Vol. 1 No. 1 (2026): Meuseuraya: Islamic Economic Journal (January-June 2026)

Purpose – This study examines the dynamic causal relationship between the Human Development Index (HDI) and Gross Regional Domestic Product (GRDP) in Aceh Province, Indonesia.

Design/methodology/approach – Annual time-series data for 2014–2023 were analyzed using the Vector Autoregression (VAR) and Vector Error Correction Model (VECM) approaches. The analysis included ADF unit root, cointegration, Granger causality, Impulse Response Function, and Variance Decomposition tests.

Findings – The results reveal a bidirectional causal relationship between HDI and GRDP. Improvements in human development stimulate economic growth, while economic growth contributes to higher levels of human development.

Research limitations/implications – The study is limited by a short observation period and focuses only on Aceh Province and two variables, namely HDI and GRDP.

Practical implications – Policymakers should integrate economic and social development strategies by strengthening investments in education, healthcare, infrastructure, and productive sectors.

Originality/value – This study contributes empirical evidence on the dynamic interaction between HDI and GRDP in Aceh using a VAR/VECM framework, providing insights for context-specific regional development policies.