This paper aims to investigate the effect of budget deficit shock on government spending in Indonesia. For this propose, this reasearch uses an alternative error correction model based on loss function of government spending. The model assumes the short run disequilibrium, in which shock variables may play an important role. A spesific loss function model is applied to develop the long run gove...

The aim of this study is to examine the nonlinear effects of fiscal and monetary policies on inflation during 1990:3 to 2013:1 based on threshold model. First lag of the liquidity growth is recognized as threshold variable with threshold value estimated at 6.37 percent. In low liquidity growth, the results indicate that inflation expectations and the lagged liquidity growth are the most importa...

Widespread concern, even alarm, over the U.S. government’s budget deficit has become one of the leading public policy issues of the decade. Talk about large federal deficits that will persist throughout the 1980s now dominates discussions otherwise intended to focus on specific spending needs--defense, for example, or medical care supports--or on tax restructuring. It also now dominates discuss...

* We wish to acknowledge J. Galí, J. M. Marqués and J. Vallés for their suggestions and comments. We also thank J. L. Fernández for providing us with the programs needed to carry out some of the tests, and R. Peruga for very helpful discussions. Abstract Two issues are addressed in this paper. First, we attempt to ascertain whether the current fiscal policy in Spain satisfies the intertemporal ...

Sri Lanka is a classic twin deficits economy characterised by fiscal dominance - high and public debt. This has manifested in degree of macroeconomic volatility, evidenced its frequent balance-of-payments crises instability. study assesses the validity triple deficit hypothesis presence trade liberalisation investigating causal association between deficit, current account financial with four-va...

Fiscal forecasts produced by international institutions came under strong criticism after the Eurozone sovereign debt crisis due to excessive optimism. Presently, organizations are also accused of applying a double standard. Their opponents claim they depict negative picture for populist governments. This paper evaluates provided IMF, European Commission and OECD based on panel EU economies sel...

Problem the fiscal deficit still has a bad influence on increase in government debt every year. So far, tended to withdraw new cover deficit.In conditions of negative primary balance, withdrawals tend deficits and failures long run. This condition is also exacerbated by Covid-19 that hit Indonesia. The exceeded 3 percent GDP. even though state finance law maximum had people's purchasing power. ...