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The behavior of fiscal policy in Indonesia in response to economic cycles

Abdurohman, A; Resosudarmo, Budy

Description

The current general wisdom regarding fiscal policy in response to fluctuations in economic cycles is to adopt countercyclical strategies: contractive during a boom to avoid overheating the economy and expansive during a recession to stimulate economic activity. This paper attempts to investigate the practical behavior of fiscal policy in Indonesia in response to economic cycles to establish whether it follows general fiscal wisdom (countercyclical) or amplifies the cycle (procyclical). An error...[Show more]

dc.contributor.authorAbdurohman, A
dc.contributor.authorResosudarmo, Budy
dc.date.accessioned2021-09-23T06:26:16Z
dc.identifier.issn0217-5908
dc.identifier.urihttp://hdl.handle.net/1885/248719
dc.description.abstractThe current general wisdom regarding fiscal policy in response to fluctuations in economic cycles is to adopt countercyclical strategies: contractive during a boom to avoid overheating the economy and expansive during a recession to stimulate economic activity. This paper attempts to investigate the practical behavior of fiscal policy in Indonesia in response to economic cycles to establish whether it follows general fiscal wisdom (countercyclical) or amplifies the cycle (procyclical). An error correction model (ECM) and an alternative model to deal with the possible endogeneity problem are utilized. This paper shows that fiscal policy in Indonesia tends to be procyclical. Observations of some other ASEAN countries, namely Malaysia, the Philippines, Singapore and Thailand, indicate that Singapore could be the only country in ASEAN that is able to implement a countercyclical fiscal policy
dc.format.mimetypeapplication/pdf
dc.language.isoen_AU
dc.publisherWorld Scientific Publishing Company
dc.rights© World Scientific Publishing Company
dc.sourceSingapore Economic Review
dc.subjectFiscal policy
dc.subjectbusiness cycle
dc.subjectdevelopment economics
dc.titleThe behavior of fiscal policy in Indonesia in response to economic cycles
dc.typeJournal article
local.description.notesImported from ARIES
local.identifier.citationvolume62
dc.date.issued2017
local.identifier.absfor140200 - APPLIED ECONOMICS
local.identifier.ariespublicationU3488905xPUB8376
local.publisher.urlhttp://www.worldscientific.com/
local.type.statusPublished Version
local.contributor.affiliationAbdurohman, A, Ministry of Finance
local.contributor.affiliationResosudarmo, Budy, College of Asia and the Pacific, ANU
local.description.embargo2099-12-31
local.bibliographicCitation.issue2
local.bibliographicCitation.startpage377
local.bibliographicCitation.lastpage401
local.identifier.doi10.1142/S0217590816500041
local.identifier.absseo910105 - Fiscal Policy
dc.date.updated2020-11-23T11:14:56Z
local.identifier.scopusID2-s2.0-84954507742
local.identifier.thomsonID000400267700007
CollectionsANU Research Publications

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