FISCAL AND MONETARY POLICY INTERACTIONS IN INDONESIA DURING PERIODS OF ECONOMIC TURMOIL IN THE US: 2001Q1-2014Q4

Authors

Chandra Utama, Katolik Parahyangan University, Indonesia.Follow
Insukindro Insukindro, Gadjah Mada University, IndonesiaFollow
Ardyanto Fitrady, Gadjah Mada University, IndonesiaFollow

Document Type

Article

Abstract

This study investigates the formation of the interaction between monetary and fiscal policies in Indonesia during periods of economic turmoil in the US (external shock) based on the Hybrid New Keynesian (HNK) model. The study estimates the HNK model using the Full Information Maximum Likelihood and time-series data over the period 2001Q1-2014Q4. The result reveals the form of coordination is a monetary-led policy mix between active monetary policy and passive fiscal policy. The degree of coordination is down when external shock increases

Recommended Citation

Utama, Chandra; Insukindro, Insukindro; and Fitrady, Ardyanto (2022) "FISCAL AND MONETARY POLICY INTERACTIONS IN INDONESIA DURING PERIODS OF ECONOMIC TURMOIL IN THE US: 2001Q1-2014Q4," Bulletin of Monetary Economics and Banking: Vol. 25: No. 1, Article 13.
DOI: https://doi.org/10.21098/bemp.v25i1.1619
Available at: https://bulletin.bmeb-bi.org/bmeb/vol25/iss1/13

First Page

97

Last Page

116

Creative Commons License

This work is licensed under a Creative Commons Attribution-NonCommercial 4.0 International License

Country

Indonesia

Affiliation

Katolik Parahyangan University