THE IMPACT OF FISCAL SPACE ON INDONESIA’S FISCAL BEHAVIOR

Authors

Marcella Alifia Kuswana Putri, Universitas Katolik Parahyangan, IndonesiaFollow
Chandra Utama, Universitas Katolik Parahyangan, IndonesiaFollow
Ivantia Savitri Mokoginta, Universitas Katolik Parahyangan, IndonesiaFollow

Document Type

Article

Abstract

This study investigates the impact of fiscal space on the probability that the government of Indonesia will be able to implement counter-cyclical fiscal behavior. We use ordinary least squares and probit methods to estimate the fiscal policy reaction function. This study confirms that increasing fiscal space can increase the probability of the government to execute its counter-cyclical behavior policy. A proposal to increase the space includes generating alternative sources of government revenues from taxes and non-taxes and redesigning subsidies toward selected targeting recipients to reduce the non-discretionary part of the government budget.

Recommended Citation

Putri, Marcella Alifia Kuswana; Utama, Chandra; and Mokoginta, Ivantia Savitri (2022) "THE IMPACT OF FISCAL SPACE ON INDONESIA’S FISCAL BEHAVIOR," Bulletin of Monetary Economics and Banking: Vol. 25: No. 2, Article 6.
DOI: https://doi.org/10.21098/bemp.v25i2.1845
Available at: https://bulletin.bmeb-bi.org/bmeb/vol25/iss2/6

First Page

235

Last Page

256

Creative Commons License

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

Country

Indonesia

Affiliation

Universitas Katolik Parahyangan