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Fiscal and Monetary Policy Interaction: Evidences and Implication for Inflation Targeting in Indonesia

Author

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  • Firman Mochtar

Abstract

Paper ini menganalisa interaksi kebijakan fiskal dan moneter di Indonesia pada masa sebelum dan sesudah krisis, dengan melakukan estimasi atas quasy fiscal activity (QFA) Bank Indonesia dan mengurai interaksi antara kebijakan fiskal dan moneter. Penulis menemukan bahwa selama masa krisis, aktifitas ini (QFA) ada dan dilakukan oleh bank sentral Indonesia. Hal ini berbeda dengan masa sebelum krisis dimana QFA memiliki besaran yang netral. Dalam kaitan interaksi kebijakan fiskal-moneter, fakta ini menunjukkan dominasi kebijakan fiskal pada masa setelah krisis. Analisa interaksi antara kebijakan fiskal dan moneter ini membawa implikasi kebijakan di Indonesia yakni perlunya disiplin dalam kebijakan fiskal dan perlunya komitmen untuk mempertahankan sustainability kebijakan tersebut. Kegagalan mencapai kebijakan fiskal yang optimal akan mengurangi efektifitas kebijakan moneter dalam rangka mengontrol inflasi meski dalam kerangka inflation targeting yang secara parsial sudah diimplementasikan oleh Bank Indonesia.

Suggested Citation

  • Firman Mochtar, 2004. "Fiscal and Monetary Policy Interaction: Evidences and Implication for Inflation Targeting in Indonesia," Bulletin of Monetary Economics and Banking, Bank Indonesia, vol. 7(3), pages 1-28, December.
    • Handle: RePEc:idn:journl:v:7:y:2004:i:3:p:1-28
    DOI: https://doi.org/10.21098/bemp.v7i3.114
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    Citations

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    Cited by:

    1. Chandra Utama & Insukindro & Ardyanto Fitrady, 2022. "Fiscal And Monetary Policy Interactions In Indonesia During Periods Of Economic Turmoil In The Us: 2001q1-2014q4," Bulletin of Monetary Economics and Banking, Bank Indonesia, vol. 25(1), pages 97-116, June.
    2. Muhammad Ali Nasir & Junjie Wu & Milton Yago & Alaa M. Soliman, 2016. "Macroeconomic policy interaction: State dependency and implications for financial stability in UK: A systemic review," Cogent Business & Management, Taylor & Francis Journals, vol. 3(1), pages 1154283-115, December.
    3. Akram, Vaseem & Rath, Badri Narayan, 2020. "What do we know about fiscal sustainability across Indian states?," Economic Modelling, Elsevier, vol. 87(C), pages 307-321.
    4. Akram, Vaseem & Rath, Badri Narayan, 2020. "Optimum government size and economic growth in case of Indian states: Evidence from panel threshold model," Economic Modelling, Elsevier, vol. 88(C), pages 151-162.
    5. Utama, Chandra, 2020. "The Effect of Twin-shock on Monetary and Fiscal Policies in Indonesia," Jurnal Ekonomi Malaysia, Faculty of Economics and Business, Universiti Kebangsaan Malaysia, vol. 54(2), pages 137-147.

    More about this item

    Keywords

    Quasi Fiscal Activities; Fiscal Policy; Monetary Policy; Inflation Targeting;
    All these keywords.

    JEL classification:

    • E11 - Macroeconomics and Monetary Economics - - General Aggregative Models - - - Marxian; Sraffian; Kaleckian
    • E31 - Macroeconomics and Monetary Economics - - Prices, Business Fluctuations, and Cycles - - - Price Level; Inflation; Deflation
    • E52 - Macroeconomics and Monetary Economics - - Monetary Policy, Central Banking, and the Supply of Money and Credit - - - Monetary Policy
    • E62 - Macroeconomics and Monetary Economics - - Macroeconomic Policy, Macroeconomic Aspects of Public Finance, and General Outlook - - - Fiscal Policy; Modern Monetary Theory

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