•  
  •  
 

Abstract

The main purpose of this study is to find the effect of budget deficit with foreign loans as source of funding on inflation and economic growth. This study focuses on transmission mechanism of budget deficit funding effects on inflation and economic growth. We use a specific simultaneous macroeconomic model which includes 17 behavioral equations and 18 identity equations with 6 blocks in this study, Two Stage least Square (TSLS) method is employed to estimate the behavioral equations in the model. This study use Indonesia secondary economic data from 1970 to 2003. Econometric tests are performed to produce BLUE estimator. This study also use stochastic simulation with 10.000 replications to simulate policy.

The results show that using foreign loan to fund budget deficit increases both economic growth and inflation. This result is also supported by the simulation results which show that increase in the proceeds of new foreign loan increases reserves which in turn increase primary money/money supply/monetary base. Interaction of monetary base with money multiplier then increases price level. Increase in capital inflow from increase in foreign loan in reases government spending which also increases government spending. Increases in the government spending then add to government capital stock so that economic growth also increases.

References

Blejer, Mario I, dan Adriene Cbeasty. "How to Measure the Fiscal Deficit." Finance and Development, September 1992, 29 (3), hlm. 40-42.

Blejcr, Mario I, dan Cbeasty, Adriene. "The Measurement Fiscal Deficits: Analytical and Methodological Issues." Journal of Economic Literatur, Desember 1991, Vol. XXIX.

Booth, Anne dan Mccawley, Peter. "Kebijakan Fiskal." dalam Anne Booth dan Peter McCawley, eds., Ekonomi Orde Baru, LP3ES, Jakarta, Februari 1996.

Buiter, Willem H, dan Patel, Urjit R. "Debt, Deficits and Inflation: An Application to the Public Finances of India." NBER (Cambridge, MA) Working Paper No. 3287, Maret 1990, http://www.nber/papers/w3287.pdf

Buiter, Willem H. "Measuring Fiscal Sustainability." Mimeo European Bank for Reconstruction and Development 1995.

Buiter, Willem H. "The Proper Measurement of Government Budget Deficits: Comprehensive Wealth Accounting or Permanent Income Accounting for the Public Sector: Its Implications for Policy Evaluation and Design." NBER (Cambridge, MA) Working Paper No. 1013, 1982, http://www.nber/papers/w lO13.pdf.

Buiter, Willem H. "International Macroeconomics." New York: Oxford University Press, 1990.

Chantrasmi, Mary. "Government Budget Deficit, Crowding-Out and Inflation in Thailand 1970-1986." Ph.D Dissertation, University of Hawaii, 1990.

Choeryanto, Syaifoel. Ekonomi Indonesia: Penurunan dan Langkah Penanggulangan. Lembaga Penerbit Fakultas Ekonomi Universitas Indonesia, 2002.

Faini, Riccardo, 1991. "The Macroeconomics of the Public Sector Deficit: The Case of Morocco." Europe, Middle East, and North Africa Regional Office Working Paper No. 631, The World Bank, Maret 1991

Ghartey, Edward E. "Monetary Pollicy And Deficits Financing In Jamaica." Journal of Economic Development, June 2003, 28(1).

Giugale, Marcelo, and Hinh T. Dinh. "Money, Inflation, and Deficit in Egypt." Europe, Middle East, and North Africa Regional Office Working Paper No. 553, The World Bank, December 1990.

Gujarati, Damodar N. Basic Econometrics 4th ed. McGraw-Hill International Editions, 2003.

Gunardi, Harry Seldadyo. "Defisit APBN dan "Fiscal Sustainability" Suatu Studi Tentang Ekonomi Indonesia 1983/1984-1999/2000." Tesis Program Magister Ilmu Ekonomi, Universitas Indonesia, Jakarta, 2000 (tidak dipublikasikan).

Gunawan, Anton Hermanto. Anggaran Pemerintah dan lnflasi di Indonesia. Jakarta: Penerbit PT Gramedia Pustaka Utama, Jakarta 1991.

Insukindro. "A Money Supply Model in Indonesia 1971-1982." Occasional Paper, Fakultas Ekonomi, UGM, Desember 1984.

Joseph, Charles PR, Arief Hartawan, dan Firman Mochtar. "kondisi dan Respon Kebijakan Ekonomi Makro Selama Krisis Ekonomi Tahun 1997-1998." Buletin Ekonomi dan Moneter Bank Indonesia Vol. 2 No. 2, September 1999.

Maryatmo, R. "Dampak Moneter Kebijakan Defisit Anggaran Pemerintah dan Peranan Asa Nalar Dalam Simulasi Model Makro-Ekonomi Indonesia (1983:1 - 2002:4)." Buletin Ekonomi Moneter dan Perbankan Bank Indonesia, September 2004.

Nasution, Anwar. "Fiscal Issues and Central Banks: Indonesia's Experience." Bank of International Settlement Working Paper No. 20, 1999.

Nasution, Anwar. "Tinjauan Triwulanan Perekonomian Indonesia." Ekonomi dan Keuangan Indonesia, 1984, XXXII (I), him. 3-29.

Nasution, Anwar. "Aspek Ekonomi Anggaran Belanja Negara." Prisma, LP3ES, edisi 5 Mei 1984, hlm. 18-31.

Pyndick, Robert S, dan Daniel L Rubinfeld. Econometric Models and Economic Forecasts 4th. Singapore: McGraw-Hill Book Co, 1998.

Ramangkura, Virabongse and Bhanupongse Nindhiprabha. "The Macroeconomics of the Public Sector Deficit: The Case of Thailand." Country Economics Department Working Paper No. 633, The World Bank: Europe, Maret 1991.

Saleh, Ali Salman. "Public Sector Deficits and Macroeconomics Performance in Lebanon." Ph.D Dissertation, University of Wollongong Australia, 2004.

Saleh, Ali Salman. "The Budget Deficit and Economic Performance: A Survey." Economics Working Paper Series, University of Wollongong, Toronto: Harcourt Brace Jovanovich, September 2003.

Seda, Frans."Kebijakan Anggaran Penerimaan dan Belanja Negara (APBN) Berimbang dan Dinamis." Dalam Heru Subiyantoro dan Singgih Riphat, eds, Kebijakan Fiskal, Penerbit Buku Kompas, 2004.

Simanjuntak, Robert. "Kesinambungan Fiskal Indonesia: Kajian Teoritis dan Uji Empiris."' Makalah seminar: Apakah Kondisi Fiskal Indonesia dalam Jangka Menengah dan Panjang akan Sustainable? Bank lndonesia-JICA, Maret 2001.

Soelistyo, Aris dan Mansur, Farid Wijaya. "Suatu Pendekatan Ekonometri Terhadap Ekonomi Makro Indonesia (1978-1994)." Jurnal Ekonomi dan Bisnis Indonesia, 1998.

Tokunaga, Suminori. "A Quarterly Macro Econometric Model for Indonesian Economy." dalam Dorodjatun Kuntjoro-Jakti, Komara Jaya, Ari Kuncoro, Syahgena Ardhila, Eds, Macroeconomics Modelling in Developing Countries: With Special Reference to Indonesia, LPEM FE-UI, September 1997.

Waluyo, Joko. "lmplikasi Pembiayaan Defisit Anggaran Pemerintah Pusat Terhadap Inflasi dan Pertumbuhan Ekonomi: Studi Kasus Indonesia 1970 - 2003." Tesis Program Magister llmu Ekonomi Universitas Indonesia, Depok, Agustus 2005 (Tidak dipublikasikan).·

Wicaksono, Gunawan dan Ariantoro, Eko. "Pengujian Validitas Data Stok Kapital dan Perkembangan Stok Kapital Indonesia." Desember 2003, 6(3).

Wicaksono, Gunawan; Ariantoro, Eko, dan Sari, A. Rheina. "Penghitungan Data Stok Kapital Dengan Metode Perpetual Inventory (PIM): Suatu Upaya Penyediaan Data Stok Kapital Untuk Penghitungan Potensial Output Dengan Pendekatan Fungsi Produksi." Buletin Ekonomi Moneter dan Perbankan, Bank Indonesia, September 2002, 5(2).

Download

Included in

Economics Commons

Share

COinS
 
 

To view the content in your browser, please download Adobe Reader or, alternately,
you may Download the file to your hard drive.

NOTE: The latest versions of Adobe Reader do not support viewing PDF files within Firefox on Mac OS and if you are using a modern (Intel) Mac, there is no official plugin for viewing PDF files within the browser window.