THE EFFECT OF TWIN DEFICIT ON ECONOMIC GROWTH IN INDONESIA
DOI:
10.54443/ijebas.v4i6.2328Published:
2024-12-31Downloads
Abstract
This study aims to determine the Effect of Twin Deficit on Economic Growth in Indonesia. This study uses a data analysis model with stationarity test, determination of Lag Length, granger causality test and VAR estimation consisting of Impulse Response Function (IRF) and Forecast Error Variance Decomposition (FEVD). The results of this study indicate that EG has a causal effect on BD, while no significant causal relationship was found from BD to EG. Meanwhile, based on the results of VAR estimation, the budget deficit variable has a positive and significant coefficient on economic growth in the short term, indicating that an increase in the budget deficit can provide a temporary boost to economic growth. IRF analysis shows that shocks to the budget deficit cause a positive response to economic growth.
Keywords:
Budget Deficit, Current Account Deficit, Economic Growth, Twin DeficitReferences
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Jurnal :
The Relationship between the Budget Deficit and Current Account Deficit in
Turkey Dr. Seyfettin Erdoğan Dr. Durmuş Çağrı Yıldırım
Twin Deficit Phenomena in the Two Government Eras in Indonesia Muhammad Ghafur Wibowo
Budget deficit and current account deficit in case of South Africa Umer Jeelanie Banday1,2 | Ranjan Aneja1
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Twin deficits and the sustainability of public debt and exchange rate policies in Lebanon _ Simon Neaime
The twin deficits hypothesis and reverse causality: A short-run analysis of Peru César R. Sobrino
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