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Siklikalitas Kebijakan Fiskal Di Indonesia
[cyclicality of fiscal policy in Indonesia]

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  • Nizar, Muhammad Afdi

Abstract

The research objectives are to examine and determine the cyclicality of fiscal policy in Indonesia, based on the response of government revenue, government spending and budget balance to the economic cycles. In addition, this research also aims to determine cyclicality of automatic stabilizers and discretionary fiscal policies. This research was conducted using quantitative approaches, namely regression model which is estimated by ordinary least square (OLS) method. Using quarterly time series data during 1970 – 2009, the results showed several conclusions : (i) the response of government revenue and income tax as an automatic stabilizer to the economic cycles tend to countercyclical; (ii) the response of government spending and discretionary variables tend to procyclical; and (iii) response of budget balance tends to acyclical.

Suggested Citation

  • Nizar, Muhammad Afdi, 2011. "Siklikalitas Kebijakan Fiskal Di Indonesia [cyclicality of fiscal policy in Indonesia]," MPRA Paper 65607, University Library of Munich, Germany.
    • Handle: RePEc:pra:mprapa:65607
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    File URL: https://mpra.ub.uni-muenchen.de/65607/1/MPRA_paper_65607.pdf
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    References listed on IDEAS

    as
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    2. Alberto Alesina & Filipe R. Campante & Guido Tabellini, 2008. "Why is Fiscal Policy Often Procyclical?," Journal of the European Economic Association, MIT Press, vol. 6(5), pages 1006-1036, September.
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    7. Bogdan Bogdanov, 2010. "Cyclicality of Fiscal Policy over the Business Cycle: an Empirical Study on Developed and Developing Countries," Working paper series 12010en, Agency for Economic Analysis and Forecasting.
    8. Steven A. Symansky & Thomas Baunsgaard, 2009. "Automatic Fiscal Stabilizers," IMF Staff Position Notes 2009/23, International Monetary Fund.
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    11. Arena, Marco & Revilla, Julio E., 2009. "Pro-cyclical fiscal policy in brazil: evidence from the states," Policy Research Working Paper Series 5144, The World Bank.
    12. Ethan Ilzetzki & Carlos A. Vegh, 2008. "Procyclical Fiscal Policy in Developing Countries: Truth or Fiction?," NBER Working Papers 14191, National Bureau of Economic Research, Inc.
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    Cited by:

    1. Nizar, Muhammad Afdi, 2013. "Fiscal Rigidities Dan Implikasinya Di Indonesia [The Implications of Fiscal Rigidities in Indonesia]," MPRA Paper 65772, University Library of Munich, Germany.
    2. Nizar, Muhammad Afdi, 2017. "Pilar-pilar Kebijakan Fiskal [Pillars of Fiscal Policy]," MPRA Paper 98516, University Library of Munich, Germany.

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    More about this item

    Keywords

    automatic stabilizer; budget balance; discretionary fiscal policy; economic cycles; government revenue; government spending;
    All these keywords.

    JEL classification:

    • C01 - Mathematical and Quantitative Methods - - General - - - Econometrics
    • H3 - Public Economics - - Fiscal Policies and Behavior of Economic Agents
    • H30 - Public Economics - - Fiscal Policies and Behavior of Economic Agents - - - General
    • H6 - Public Economics - - National Budget, Deficit, and Debt
    • H61 - Public Economics - - National Budget, Deficit, and Debt - - - Budget; Budget Systems
    • H62 - Public Economics - - National Budget, Deficit, and Debt - - - Deficit; Surplus

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