Fiscal Cyclicality Under State Finances Law in Indonesia

This study aims to analyze the cyclicality of fiscal policy under state finances law in Indonesia. The Indonesian government officially enacted 2003 and 2004 Laws on State Finances, it regulates rules covering amount budget deficit balanced rules. rule is expected encourage become countercyclical provide buffering deal with various economic shocks. uses quarterly time-series data from 2001 2019. years 2001-2004 are used as prior implementing Finance Law. Moreover, 2005 – 2019 time capture effects after a dynamic distributed lag model see effect GDP spending behavior. indicates that before Law behaved acyclically. Meanwhile, Laws, this behavior still procyclical. It means have not been effective changing direction be countercyclical.