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Pengaruh Defisit Anggaran Terhadap Defisit Transaksi Berjalan Di Indonesia
[The Effect of Budget Deficit on Current Accounts Deficit in Indonesia]

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  • Nizar, Muhammad Afdi

Abstract

This study aims to determine the effect of budget deficits on the current accounts deficit in Indonesia during 1990 – 2012. Based on quarterly time series data and using VAR model, the results of this study indicate that : (i) a positive effect of the budget deficit on the current account deficit. In the period 1990 - 2012 the effect of budget deficits is relatively small and rapid (one quarter), while in the period 1990-1997 budget deficits had greater influence with a longer duration (a semester) on current accounts deficit, and (ii) the results of this study confirm and in line with the twin deficit hypothesis. Therefore, the government should take concrete steps to reduce imports of oil (fuel). Because of fuel imports potentially add to the current accounts deficit and also the amount of fuel subsidies (and deficit) in the state budget.

Suggested Citation

  • Nizar, Muhammad Afdi, 2013. "Pengaruh Defisit Anggaran Terhadap Defisit Transaksi Berjalan Di Indonesia [The Effect of Budget Deficit on Current Accounts Deficit in Indonesia]," MPRA Paper 65609, University Library of Munich, Germany.
    • Handle: RePEc:pra:mprapa:65609
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    References listed on IDEAS

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    Cited by:

    1. Hasanah, Erni Ummi & Sarungu, JJ. & Mulyanto, & Soesilo, AM. & Suparjito,, 2019. "The Effect of Intervening Variable towards Twin Deficit in Indonesia: The Application of Path Analysis," Jurnal Ekonomi Malaysia, Faculty of Economics and Business, Universiti Kebangsaan Malaysia, vol. 53(2), pages 177-184.

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    More about this item

    Keywords

    balance of payments ; budget deficit; current accounts deficit; twin deficit hypothesis;
    All these keywords.

    JEL classification:

    • E2 - Macroeconomics and Monetary Economics - - Consumption, Saving, Production, Employment, and Investment
    • E61 - Macroeconomics and Monetary Economics - - Macroeconomic Policy, Macroeconomic Aspects of Public Finance, and General Outlook - - - Policy Objectives; Policy Designs and Consistency; Policy Coordination
    • E62 - Macroeconomics and Monetary Economics - - Macroeconomic Policy, Macroeconomic Aspects of Public Finance, and General Outlook - - - Fiscal Policy; Modern Monetary Theory

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