Should Indonesia Suffer from More Reduction of the Subsidy to the Petroleum Sector?
AbstractWe numerically examine the impact of the actually implemented reduction policy of the subsidy to the petroleum sector by using a static CGE model with the latest input-output table of Indonesia of year 2008. Our simulation results indicate that the Indonesian economy suffered from the actually implemented policy with a welfare loss of 28,417.78 billion rupiah even with the conversion policy. Furthermore, the proposed future reduction policy by the Ministry of Finance would unavoidably result in a welfare loss even when the government continues the current conversion policy. However, our simulation results also suggest that a new future conversion policy with a slightly additional subsidy to the LPG sector would eventuate in completely offsetting the negative effect of the proposed plan on the future welfare with an expanding government expenditure.
Download InfoIf you experience problems downloading a file, check if you have the proper application to view it first. In case of further problems read the IDEAS help page. Note that these files are not on the IDEAS site. Please be patient as the files may be large.
Bibliographic InfoPaper provided by Research Institute, International University of Japan in its series Working Papers with number EMS_2011_25.
Length: 46 pages
Date of creation: Dec 2011
Date of revision:
Contact details of provider:
Postal: 777 Kokusai-cho, Minami Uonuma0-shi, Niigata 949-7277 JAPAN
Web page: http://www.iuj.ac.jp/research/
More information through EDIRC
Computable General Equilibrium (CGE) Model; Petroleum; Subsidy; Welfare; Simulation;
Find related papers by JEL classification:
- C68 - Mathematical and Quantitative Methods - - Mathematical Methods; Programming Models; Mathematical and Simulation Modeling - - - Computable General Equilibrium Models
- D57 - Microeconomics - - General Equilibrium and Disequilibrium - - - Input-Output Tables and Analysis
- D58 - Microeconomics - - General Equilibrium and Disequilibrium - - - Computable and Other Applied General Equilibrium Models
- D60 - Microeconomics - - Welfare Economics - - - General
- E17 - Macroeconomics and Monetary Economics - - General Aggregative Models - - - Forecasting and Simulation: Models and Applications
- H53 - Public Economics - - National Government Expenditures and Related Policies - - - Government Expenditures and Welfare Programs
This paper has been announced in the following NEP Reports:
- NEP-ALL-2011-12-19 (All new papers)
- NEP-CMP-2011-12-19 (Computational Economics)
- NEP-ENE-2011-12-19 (Energy Economics)
- NEP-SEA-2011-12-19 (South East Asia)
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
- Charles L. Ballard & Don Fullerton & John B. Shoven & John Whalley, 1985. "Introduction to "A General Equilibrium Model for Tax Policy Evaluation"," NBER Chapters, in: A General Equilibrium Model for Tax Policy Evaluation, pages 1-5 National Bureau of Economic Research, Inc.
- Charles L. Ballard & Don Fullerton & John B. Shoven & John Whalley, 1985. "A General Equilibrium Model for Tax Policy Evaluation," NBER Books, National Bureau of Economic Research, Inc, number ball85-1, December.
- Scarf,Herbert E. & Shoven,John B., 2008. "Applied General Equilibrium Analysis," Cambridge Books, Cambridge University Press, number 9780521070935, October.
- Djoni Hartono & Budy P. Resosudarmo, 2006. "The Economy-wide Impact of Fuel Oil, Gas and Electricity Pricing and Subsidy Policies as well as Their Consumption Improvement Efficiency in Indonesia," Working Papers in Economics and Development Studies (WoPEDS) 200611, Department of Economics, Padjadjaran University, revised Dec 2006.
- Ihori, Toshihiro & Kato, Ryuta Ray & Kawade, Masumi & Bessho, Shun-ichiro, 2011.
"Health insurance reform and economic growth: Simulation analysis in Japan,"
Japan and the World Economy,
Elsevier, vol. 23(4), pages 227-239.
- Toshihiro Ihori & Ryuta Ray Kato & Masumi Kawade & Shun-ichiro Bessho, 2011. "Health Insurance Reform and Economic Growth: Simulation Analysis in Japan," Working Papers EMS_2011_17, Research Institute, International University of Japan.
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Kazumi Imai, Office of Academic Affairs).
If references are entirely missing, you can add them using this form.