Indonesia’s Ponzi Economy: Does Financial Crisis Give a Lesson
After ten years of Asian crisis, it is still unclear what the roots of crises are really. This paper seeks to the explanation of the evolution of the capitalism system in Indonesia for gaining an important indication of the root of crisis as well as the future risk of crises of the Indonesia’s economy. This paper uses the micro evidence based on firm-level data in order to understand the behaviour of economic agents due to financial crisis by a question of whether the behaviour changes. Specifically, this paper is concerned with the financing behaviour of the firms in understanding the capitalism system which exists and evolves in Indonesia today based on the Minsky’s taxonomy (hedge, speculative or ponzi system of capitalism). Furthermore, this paper should have an implication in policies level by giving an early warning, whether Indonesia is still vulnerable to the crisis in the future. This paper begins by analyzing the financial ratio of listed companies in Indonesia by using the accounting data provided by the Jakarta Stock Exchange (JSX) and Indonesian Capital Market Directory published by ECFIN (Institute for Economic and Finance Research) in various publications
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