The effect of intervening variable towards twin deficit in Indonesia: the application of path analysis
This study examines twin deficits in Indonesia during the period of 1969-2015 using Path Analysis. Path analysis can test the direct and indirect effect of the variables studied and simultaneously identify the role of the intervening variables. Data used in this study include government budget defic...
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Penerbit Universiti Kebangsaan Malaysia
2019
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my-ukm.journal.141272020-02-06T13:42:50Z http://journalarticle.ukm.my/14127/ The effect of intervening variable towards twin deficit in Indonesia: the application of path analysis Erni Ummi Hasanah, Sarungu, J.J Mulyanto, Soesilo, A.M Suparjito, This study examines twin deficits in Indonesia during the period of 1969-2015 using Path Analysis. Path analysis can test the direct and indirect effect of the variables studied and simultaneously identify the role of the intervening variables. Data used in this study include government budget deficit (BD) as the exogenous variable, interest rate (IR) and domestic exchange rate (FER) as the endogenous intervening variables, and deficit on the current account of balance of payment (DBOP) as the endogenous variable. This study found no direct effect between BD and DBOP. The finding indicates that an increase in budget deficit may not necessarily lead to an increase in current account deficits, and therefore do not prove twin deficits in Indonesia. Therefore, Mundell-Fleming's theory in Indonesia is not applicable because the role of intervening variables (IR and FER) in mediating twin deficits is relatively weak. Penerbit Universiti Kebangsaan Malaysia 2019 Article PeerReviewed application/pdf en http://journalarticle.ukm.my/14127/1/jeko_53%282%29-13.pdf Erni Ummi Hasanah, and Sarungu, J.J and Mulyanto, and Soesilo, A.M and Suparjito, (2019) The effect of intervening variable towards twin deficit in Indonesia: the application of path analysis. Jurnal Ekonomi Malaysia, 53 (2). pp. 1-10. ISSN 0127-1962 http://www.ukm.my/fep/jem/content/2019-2.html |
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This study examines twin deficits in Indonesia during the period of 1969-2015 using Path Analysis. Path analysis can test the direct and indirect effect of the variables studied and simultaneously identify the role of the intervening variables. Data used in this study include government budget deficit (BD) as the exogenous variable, interest rate (IR) and domestic exchange rate (FER) as the endogenous intervening variables, and deficit on the current account of balance of payment (DBOP) as the endogenous variable. This study found no direct effect between BD and DBOP. The finding indicates that an increase in budget deficit may not necessarily lead to an increase in current account deficits, and therefore do not prove twin deficits in Indonesia. Therefore, Mundell-Fleming's theory in Indonesia is not applicable because the role of intervening variables (IR and FER) in mediating twin deficits is relatively weak. |
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Article |
author |
Erni Ummi Hasanah, Sarungu, J.J Mulyanto, Soesilo, A.M Suparjito, |
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Erni Ummi Hasanah, Sarungu, J.J Mulyanto, Soesilo, A.M Suparjito, The effect of intervening variable towards twin deficit in Indonesia: the application of path analysis |
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Erni Ummi Hasanah, Sarungu, J.J Mulyanto, Soesilo, A.M Suparjito, |
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Erni Ummi Hasanah, |
title |
The effect of intervening variable towards twin deficit in Indonesia: the application of path analysis |
title_short |
The effect of intervening variable towards twin deficit in Indonesia: the application of path analysis |
title_full |
The effect of intervening variable towards twin deficit in Indonesia: the application of path analysis |
title_fullStr |
The effect of intervening variable towards twin deficit in Indonesia: the application of path analysis |
title_full_unstemmed |
The effect of intervening variable towards twin deficit in Indonesia: the application of path analysis |
title_sort |
effect of intervening variable towards twin deficit in indonesia: the application of path analysis |
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Penerbit Universiti Kebangsaan Malaysia |
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2019 |
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http://journalarticle.ukm.my/14127/1/jeko_53%282%29-13.pdf http://journalarticle.ukm.my/14127/ http://www.ukm.my/fep/jem/content/2019-2.html |
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