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Stabilization and Structural Adjustment in Indonesia: An Intertemporal General Equilibrium Analysis


  • David Roland-Holst


Like most petroleum producing countries, Indonesia experienced a sharp deterioration in its export conditions during the early 1980s. Given the country's heavy reliance on oil taxation and relatively low per capita income, this exogenous shock seriously disrupted development plans and induced extensive structural adjustments in the economy. Indonesia has taken greater initiative than some to stabilize its economy and reduce the distortionary threat of expansionist policies inherited from the oil boom. Its success in this regard was due to an eventual willingness to implement voluntary stabilization and relatively favorable credit rating. In this study, a calibrated intertemporal general equilibrium model is used to evaluate the Indonesian adjustment policy of the period 1980-86 with particular attention to the growth and distributional implications of adjustment. The findings of this report indicate that more efficacious policies could have been implemented. These policies would ... L'Indonésie, comme la plupart des pays producteurs de pétrole, a connu au début des années 80 une sérieuse détérioration dans les conditions de ses exportations. Ce choc exogène — compte tenu de la dépendance marquée du pays à l'égard des taxes pétrolières et d'un revenu par habitant relativement faible — a gravement compromis les plans de développement et a introduit dans l'économie des politiques d'ajustements structurels importantes. L'Indonésie a cependant pris plus d'initiatives que d'autres pays pour stabiliser son économie et réduire les risques de politiques expansionistes héritées du boom pétrolier. Le succès qu'elle a connu découle et de son désir d'instaurer une stabilisation volontaire et d'une cote de crédit relativement favorable. Ce document technique utilise un modèle d'équilibre général inter-temporel pour évaluer la politique d'ajustement menée entre 1980 et 1986, en s'intéressant particulièrement à la croissance et aux conséquences distributives de ...

Suggested Citation

  • David Roland-Holst, 1992. "Stabilization and Structural Adjustment in Indonesia: An Intertemporal General Equilibrium Analysis," OECD Development Centre Working Papers 83, OECD Publishing.
  • Handle: RePEc:oec:devaaa:83-en

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    References listed on IDEAS

    1. Hall, Robert E, 1978. "Stochastic Implications of the Life Cycle-Permanent Income Hypothesis: Theory and Evidence," Journal of Political Economy, University of Chicago Press, vol. 86(6), pages 971-987, December.
    2. Jeffrey D. Sachs, 1989. "Developing Country Debt and Economic Performance. The International Financial System," NBER Chapters,in: Developing Country Debt and Economic Performance, Volume 1: The International Financial System, pages -12 National Bureau of Economic Research, Inc.
    3. Jeffrey D. Sachs, 1989. "Developing Country Debt and the World Economy," NBER Books, National Bureau of Economic Research, Inc, number sach89-3, January.
    4. Philippe Callier, 1989. "Debt Relief and Adjustment Incentives in a Financially Open Economy: Comment on Corden," IMF Staff Papers, Palgrave Macmillan, vol. 36(2), pages 514-522, June.
    5. W. Max Corden, 1988. "Debt Relief and Adjustment Incentives," IMF Staff Papers, Palgrave Macmillan, vol. 35(4), pages 628-643, December.
    6. Alain Ize & Guillermo Ortiz, 1987. "Fiscal Rigidities, Public Debt, and Capital Flight," IMF Staff Papers, Palgrave Macmillan, vol. 34(2), pages 311-332, June.
    7. Jeffrey D. Sachs, 1989. "Introduction to "Developing Country Debt and the World Economy"," NBER Chapters,in: Developing Country Debt and the World Economy, pages 1-34 National Bureau of Economic Research, Inc.
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    Cited by:

    1. Lee, Hiro & Roland-Holst, David, 1997. "The environment and welfare implications of trade and tax policy," Journal of Development Economics, Elsevier, vol. 52(1), pages 65-82, February.

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