Triple Deficit Hypothesis: Has it happened in Indonesia?

DOI

10.2991/piceeba2-18.2019.130How to use a DOI?

Keywords

Triple Deficit Hypothesis, Budget Deficit, Current Account Deficit, Saving-investment Gap, Vector Autoregression (VAR)

Abstract

The purpose of this study to analyze he causal relationship of triple deficit hypotheis between budget deficit, current account deficit, and saving-investment gap in Indonesia. Budget deficit is a deficit that occurs when state revenue is smaller than the country's larger expenditure. Whereas the current account deficit is a condition of the current account balance that has a deficit due to a smaller export value compared to imports of a country coupled with a net outflow of a country. The savings gap is the inability of domestic savings to finance non-financial investments due to the small amount of domestic savings while the need for domestic investment is quite large. So this deficit phenomenon is known as triple deficit. By using Vector Autoregression (VAR) method and time series data from the year 2003:Q1-2016:Q4, this study shows that budget deficit and current account deficit have one-way relationship, budget deficit and saving-investment gaphave one-way relationship and current account deficit and saving-investment gap not have causality or one-way relationship.

Copyright

© 2019, the Authors. Published by Atlantis Press.

Open Access

This is an open access article distributed under the CC BY-NC license (http://creativecommons.org/licenses/by-nc/4.0/).

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TY  - CONF
AU  - Yeniwati Yeniwati
PY  - 2019/04
DA  - 2019/04
TI  - Triple Deficit Hypothesis: Has it happened in Indonesia?
BT  - Proceedings of the 2nd Padang International Conference on Education, Economics, Business and Accounting (PICEEBA-2 2018)
PB  - Atlantis Press
SP  - 1044
EP  - 1049
SN  - 2352-5428
UR  - https://doi.org/10.2991/piceeba2-18.2019.130
DO  - 10.2991/piceeba2-18.2019.130
ID  - Yeniwati2019/04
ER  -