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Structural breaks and fiscal sustainability of the Indonesian government budget

Economic Journal of Emerging Markets

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Title Structural breaks and fiscal sustainability of the Indonesian government budget
 
Creator Mokoginta, Ivantia S.
Stephanie, Ria Marisa
 
Subject Economic
fiscal, debt, portfolio, consolidation, government.
E62, H1, H2, H3
 
Description The purpose of this study is to identify government policy regimes or structural breaks as indicated by significant changes in debt to GDP ratio and to identify fiscal sustainability in Indonesia from 2000 to 2013. Using Fiscal Reaction Functions framework and Smooth Transition Regression, the study found two structural breaks following the three regimes. Foreign debt repayment dominates the government policy during Regime I. Fiscal consolidations and discipline such as reducing energy subsidies in 2002 and 2005, managing debt portfolio and increasing government revenues were dominant during Regime II. In Regime III, the government increases domestic debt, particularly to finance stimulus package. This study also found that the Indonesian fiscal is unsustainable during the period of study. Overall, the findings seem to suggest that managing government debt through fiscal consolidations, foreign debt repayment and debt portfolio management is not sufficient to achieve long-term fiscal sustainability.
 
Publisher Universitas Islam Indonesia
 
Contributor —
 
Date 2015-04-04
 
Type info:eu-repo/semantics/article
info:eu-repo/semantics/publishedVersion
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Format application/pdf
 
Identifier http://journal.uii.ac.id/JEP/article/view/4255
10.20885/ejem.vol7.iss1.art4
 
Source Economic Journal of Emerging Markets; Volume 7 Issue 1, 2015; 33-47
2502-180X
2086-3128
 
Language eng
 
Relation http://journal.uii.ac.id/JEP/article/view/4255/3788
 
Coverage developing countries
identify government policy regimes or structural breaks
significant changes in debt to GDP ratio and to identify fiscal sustainability in Indonesia from 2000 to 2013
 
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