Economic and Finance in Indonesia
Aims & Scope EFI mainly covers original idea related to the Economics and Finance in Indonesia. Published articles can be either theoretical, empirical, or in between of those two polar variants. The journal covers specific areas, including but not limited to: Agricultural Economics Capital Market Demography Development Economics Economy in Crisis Economy of Rural Areas Education Economics Energy Economics Environmental and Natural Resources Economics Financial Sector Health Economics History of Economic Thoughts Industrial Economics Institutional Aspect of Economy International Economics Investment Labor Economics Maritime Economics Methodology of Economics Monetary Economics Political Economics Poverty Economics Public Policy Public Sector Economics Regional Economics Urban Economics
Articles
104 Documents
<![CDATA[The Impact of Lagging-Region Status on District Poverty in Indonesia ]]>
<![CDATA[Nasrudin, Rus'an]]>
<![CDATA[ Economics and Finance in Indonesia Vol. 62, No. 1 ]]>
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<![CDATA[Reducing subnational imbalances of development progress is unquestionable policy for heterogeneous Indonesia. This paper examines the impact of policy that assigns a lagging-region status namely status daerah tertinggal (DT) on poverty rate and poverty gap among districts in Indonesia in the two period of SBY presidency. The panel data fixed effect combined with propensity score matching is used to tackle the selection bias due to the nature of the policy, unobserved heterogeneity and omitted variable bias. The results show that the lagging-region status that was aimed to mainstream central and district's budget toward lagging regions statistically significant reduces poverty rate and poverty gap in the period. The DT status, on average is associated with 0.75 percentage point of reduction in the poverty rate and 7% reduction in the poverty gap index.]]>
<![CDATA[What are the Challenges in Designing An Effective Personal Income Tax System? ]]>
<![CDATA[Raeni, Raeni]]>
<![CDATA[ Economics and Finance in Indonesia Vol. 62, No. 1 ]]>
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<![CDATA[This article aims to examine the challenges of designing individual's income tax systems in general and particularly to observe taxpayers behaviour in developing countries. This study used case study approach to gain in depth understanding type of taxpayers attitude towards personal income tax systems. Based on the analyses, tax behaviour, which comprises the perception of fairness and motivation to comply, attracts urgent challenges in designing effective tax on personal income in every country and mainly underdeveloped countries. Every human being in each country has their social pattern towards tax policy. When the individual perception of fairness is significant, it will harmonise the client and service approach between taxpayers and governments. This condition would influence tax morale of individuals to comply with the policy and achieve high compliance rate. Therefore, it has argued that personal view of fairness and their motivation to comply with tax systems are becoming vital challenges in designing the tax policy on individual income.]]>
<![CDATA[Determination of Competition Conventional Bank in Banking Industry in Indonesia ]]>
<![CDATA[Qori'ah, Ciplis Gema]]>
<![CDATA[ Economics and Finance in Indonesia Vol. 62, No. 1 ]]>
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<![CDATA[The aim of this study is to determine the level of concentration and competition behavior of conventional commercial banks in the national banking industry. This study focuses on descriptive analysis and quantitative analysis using panel data regression for 9 conventional commercial banks during 2003-2014. Results of eclectic analysis are supposed that behavior of banks is less competitive due to high levels of concentration in the banking industry. While the results of panel data regression show that the variables of bank interest expense, operating expense, other operating incomes and variable of loanable funds significantly affect the income of conventional banks.]]>
<![CDATA[Financial Integration in ASEAN-5 ]]>
<![CDATA[Gabriella, Laura Grace]]>;
<![CDATA[Suryanarayana, Revathy]]>;
<![CDATA[Esady, Vania]]>
<![CDATA[ Economics and Finance in Indonesia Vol. 62, No. 1 ]]>
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<![CDATA[The financial integration in South East Asia has varied over time. This paper focuses on three periods: before, during, and after the global financial crisis in 2008. This paper finds that ASEAN-5 countries have indeed taken a step towards financial integration. While we do not observe any (cointegrating) long-run relationships between the ASEAN-5 countries, we find that there has been a significant increase in the volatility spillovers between them. This is particularly true in the recovery period following the global financial crisis.]]>
<![CDATA[The Existence of Long-Run PPP: A Comparison between Developed and Developing Countries ]]>
<![CDATA[Iskandar, Sulistiadi]]>
<![CDATA[ Economics and Finance in Indonesia Vol. 62, No. 2 ]]>
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<![CDATA[McNown & Wallace (1989) argued that PPP will tend to holds in less developed countries due to the domination of nominal factors in the economy. In this study we try to investigate the existence of long-run PPP in eight countries consisting four developed and developing countries. Here we show that there is a strong evidence that long-run PPP holds for Germany, United Kingdom, and Chile. Furthermore, the additional tests also show that symmetry and proportionality conditions seem to hold in the three economies. As for other five economies, long-run PPP seems to be absence. Although one step general Error Correction Model and Johansen-Juselius cointegration procedure generates conflicting result, the result of both technique do not show a tendency for PPP to hold in developing countries thus rejecting argument proposed by McNown and Wallace.]]>
<![CDATA[Lowering Regional Inflation? Improve Budget Absorption ]]>
<![CDATA[Adrison, Vid]]>
<![CDATA[ Economics and Finance in Indonesia Vol. 62, No. 2 ]]>
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<![CDATA[The subnational government spending in Indonesia exhibit a highly skewed distribution, i.e., it is very low in the first two-quarters and then increases significantly in the last two-quarters. Such explosive pattern poses two disadvantages. First, the regional output will fall below its optimal level as the low government capital expenditure leads to a fewer provision of public goods. Second, a significant increase in government spending in the later quarter pushes the short run aggregate demand to the northeast and creates an inflationary pressure in the following quarters. In this study, we analyze the effect of quarterly regional government expenditure growth on regional inflation during 2010-2014. Using Arellano Bond GMM estimation, we find government expenditure growth leads to higher inflation in the same quarter. A percentage increase in non-capital expenditure spending results in a higher inflation than a percentage increase in capital spending.]]>
<![CDATA[Indebtedness and Subjective Financial Wellbeing of Households in Indonesia ]]>
<![CDATA[Handayani, Dwini]]>
<![CDATA[ Economics and Finance in Indonesia Vol. 62, No. 2 ]]>
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<![CDATA[Indebtedness is an element to foresee household financial wellbeing. This vulnerability could be determined objectively and subjectively. Objective financial vulnerability is the objective ability to make ends meet that is analyzed using household income and characteristics. Measurement in subjective welbeing is determined by household perceptions in their ability to make ends meet. Household behavior with different perceptions will behave differently. Indebtedness is analyzed using the Indonesian Family Life Survey (IFLS) 5 with the Ordinary Least Square method. The inferential shows that both objective and subjective financial wellbeing influence household indebtedness. Kedalaman hutang merupakan elemen untuk mengetahui kesejahteraan finansial rumah tangga. Kerentanan ini dapat dilihat secara objektif maupun subjektif.]]>
<![CDATA[Portfolio Flows into Indonesia: Push or Pull? ]]>
<![CDATA[Nuryakin, Chaikal]]>
<![CDATA[ Economics and Finance in Indonesia Vol. 62, No. 2 ]]>
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<![CDATA[This paper focuses on the dynamic of the portfolio flows into Indonesia. The result of Structural Vector Autoregression (SVAR) model reveals that push factors is more dominant than pull factors in explaining portfolio flows into Indonesia. Portfolio flows into Indonesia are positively correlated with regionals stock market performance and negatively correlated to the federal funds rate. On the pull factors, domestic risk (the Credit Default Swap spread) is more dominant than domestic return (the BI rate) in explaining the flows. Thus, it is important for authorities to have more focus on domestic risk relative to rate of return in managing portfolio flows. In addition, the negative impact of the lagged Indonesia stock market index to the capital flows indicates a counter cyclical investment behavior of global investors.]]>
<![CDATA[Is Inflation Target Announced by Bank Indonesia the Most Accurate Inflation Forecast? ]]>
<![CDATA[Rachman, Faisal]]>
<![CDATA[ Economics and Finance in Indonesia Vol. 62, No. 2 ]]>
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<![CDATA[This article investigates whether following Bank Indonesia's explicit inflation targets (forward-looking) is a more accurate method of predicting inflation rate in Indonesia than forecast methods utilizing past information of macroeconomic data (backward-looking). The analysis is conducted by performing naive, univariate, and multivariate time-series models with an out-of-sample forecast evaluation period of January 201-December 2016. It is found that the backward-looking approach outperforms the forward-looking approach at all forecast horizons, indicating that Bank Indonesia still does not succeed to anchor inflation expectation towards the desired level.]]>
<![CDATA[Public Spending and Learning Outcomes of Basic Education at the District Level in Indonesia ]]>
<![CDATA[Jasmina, Thia]]>
<![CDATA[ Economics and Finance in Indonesia Vol. 62, No. 3 ]]>
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<![CDATA[Since 2009, the Indonesian government has fully allocated 20 percent of its budget on education. Though the increase of financial resources has led to an improvement of the access to education, challenges on the quality of education persist. By employing a cross-districts analysis in Indonesia during 2010-2015, this study aims to analyze the impact of government spending on the adjusted-national examination scores at the junior secondary education. This study shows that the central and local government spending have no significant impact on the scores. Whereas, the central government spending on teachers, and the socioeconomic factors such as poverty and health are significant determinants.]]>
