THE IMPACT OF FISCAL SPACE ON INDONESIA’S FISCAL BEHAVIOR

  • Marcella Alifia Kuswana Putri Universitas Katolik Parahyangan
  • Chandra Utama Universitas Katolik Parahyangan
  • Ivantia Savitri Mokoginta Universitas Katolik Parahyangan
Keywords: Fiscal policy, Fiscal space, Fiscal deficit, Business cycle, Macroeconomic stabilization

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.

Downloads

Download data is not yet available.
Published
2022-08-31
How to Cite
Putri, M. A. K., Utama, C., & Mokoginta, I. (2022). THE IMPACT OF FISCAL SPACE ON INDONESIA’S FISCAL BEHAVIOR. Buletin Ekonomi Moneter Dan Perbankan, 25(2), 235-256. https://doi.org/10.21098/bemp.v25i2.1845
Section
Articles