Open AccessTwin Deficit Phenomena in the Two Government Eras in Indonesia
Author(s) -
Muhammad Ghafur Wibowo
Publication year - 2020
Publication title -
jurnal analisis bisnis and ekonomi/jurnal analisis bisnis ekonomi
Language(s) - English
Resource type - Journals
eISSN - 2579-647X
pISSN - 1693-5950
DOI - 10.31603/bisnisekonomi.v18i1.2994
Subject(s) - deficit spending , current account , balance of trade , gross domestic product , economics , government (linguistics) , causality (physics) , granger causality , vector autoregression , government budget , variable (mathematics) , balance (ability) , product (mathematics) , macroeconomics , monetary economics , exchange rate , econometrics , public finance , psychology , mathematics , debt , linguistics , philosophy , physics , geometry , quantum mechanics , neuroscience , mathematical analysis
The aim of this study is to analyze the development of the budget deficit and current account deficit in Indonesia in the era of President SBY and President Jokowi and to compare between the two eras. This study also analyzes the relationship of twin deficits to the Gross Domestic Product (GDP) and the interest rate (r). The analytical tool used was independent t-test (for comparison) and Vector Auto-Regressive (VAR). The data used comes from the International Monetary Fund (IMF), 2004:Q1-2018: Q3. The result showed that the budget deficit was the same in the two eras of government, but the trade balance deficit in the era of President Jokowi was far higher than before. The budget deficit has a significant effect on the trade balance deficit but does not apply otherwise (no causality). Variable gross domestic product and interest rates significantly influence both types of deficits.