Does Indonesia’s macroeconomy work well towards the political year?

Verico, Kiki (2018): Does Indonesia’s macroeconomy work well towards the political year?

Abstract

This paper utilizes the timeframe of 2014-2018 as the period with some of the global underperformed macroeconomic indicators. This paper found that in late 2016, Indonesia’s macroeconomic indicators started shown some improvements that keep real and monetary sector’s equilibrium to be stable. This paper observes the external balance of current account, exchange rate stability, inflation and interest rate as well as consumption patterns, saving-investment gap, fiscal discipline & fiscal sustainability. It analyses the government expenditure multiplier, real & monetary sector stability and institutional coordination between fiscal authority, monetary authority, and financial service authority. Real sector improvements which have been rolling since 2017 has significantly contributed to the recent Indonesia’s macroeconomic stability. Technically, if all on the track, this will sustain during the upcoming political year of 2019.

• Item Type: MPRA Paper
• Language: English
• Keywords: Current Account, Exchange Rate, Economic Growth, Inflation, Interest Rate, Saving-Investment Gap, Real Sector Competitiveness, Fiscal Balance & Monetary Policy
• Subjects: E - Macroeconomics and Monetary Economics > E0 - General > E00 - General; E - Macroeconomics and Monetary Economics > E2 - Consumption, Saving, Production, Investment, Labor Markets, and Informal Economy; E - Macroeconomics and Monetary Economics > E3 - Prices, Business Fluctuations, and Cycles > E31 - Price Level ; Inflation ; Deflation; E - Macroeconomics and Monetary Economics > E4 - Money and Interest Rates > E43 - Interest Rates: Determination, Term Structure, and Effects; E - Macroeconomics and Monetary Economics > E5 - Monetary Policy, Central Banking, and the Supply of Money and Credit > E50 - General; E - Macroeconomics and Monetary Economics > E6 - Macroeconomic Policy, Macroeconomic Aspects of Public Finance, and General Outlook > E62 - Fiscal Policy; F - International Economics > F1 - Trade; F - International Economics > F4 - Macroeconomic Aspects of International Trade and Finance; H - Public Economics > H0 - General

References

Basri, M.C. (2017), India and Indonesia: Lessons Learned from 2013 Taper Tantrum, Bulletin of Indonesian Economic Studies (BIES), Vol.53 (2), pp. 137-160

Enderwick, P (2005), Attracting desirable FDI: theory and evidence, UNCTAD, Vol. 2(14), pp.1-29, August

Hoekman, B & Javorick, S. (2006), Global Integration and Technology Transfer, The World Bank Working Paper: January 1st

Kurniawati, H. & Verico, K. (2017), Hubungan Ekonomi Fundamental antara Nilai Tukar Riil dan Neraca Transaksi Berjalan: Studi Kasus ASEAN4 Periode 1990 -2015, Unpublished Undergraduate Thesis

Lall, S. (2004), Reinventing Industrial Strategy: The Role of Government Policy in Building Industrial Competitiveness, UNCTAD of the G24 Discussion Paper Series

LPEM FEB UI (2017), Quantitative Assessment on Logistic & Investment Related Packages, Unpublished Report

Mises, L.V. (1912), The Theory of Money & Credit, CreateSpace, USA

Nuryakin, C., et all (2017), Financial Inclusion through Digital Financial Services and Branchless Banking: Inclusiveness, Challenges & Opportunities, LPEM Working Paper 008, June

Prabowosunu, A., and Verico, K. (2017), Indonesia’s Short-Term Capital Inflows in 2005-2015 Period: A Blessing or A Curse, Unpublished Undergraduate Thesis

Prasad, E., Rajan, R., and Subramanian, A. (2006), Foreign Capital and Economic Growth, IMF Working Paper: August 30th

Verico, K. (2011). Achieving Indonesia’s Golden Moment of Economic Growth, The Jakarta Post, August 3rd

Verico, K. (2016), TPP: Indonesia’s Perspectives, presented in ISEAS Singapore on September 2nd

Verico, K. (2017). Indonesia towards 2030 and beyond: A Long Run International Trade Foresight, MPRA: June 7th

Verico, K. (2017). Membaca Fenomena Makroekonomi 2017, Tempo Magazine, 16-22 October

Verico, K (2017), Perdagangan Internasional Indonesia Menuju 2030 dan Seterusnya, in Indonesia Tahun 2030: Ide dan Gagasan Ekonom Muda FEB UI, eds pp.75-104, Kontan Publishing: DKI Jakarta

Verico, K. (2018), Status Investasi dan Tantangan Ekonomi, Tempo Magazine, 15-21 January

World Bank (2017), Indonesia Economic Quarterly Report, the World Bank: Jakarta, October