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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Main Authors:	Erni Ummi Hasanah, Sarungu, J.J, Mulyanto, Soesilo, A.M, Suparjito
Format:	Article
Language:	English
Published:	Penerbit Universiti Kebangsaan Malaysia 2019
Online Access:	http://journalarticle.ukm.my/14127/ http://journalarticle.ukm.my/14127/ http://journalarticle.ukm.my/14127/1/jeko_53%282%29-13.pdf

id	ukm-14127
recordtype	eprints
spelling	ukm-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
repository_type	Digital Repository
institution_category	Local University
institution	Universiti Kebangasaan Malaysia
building	UKM Institutional Repository
collection	Online Access
language	English
description	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.
format	Article
author	Erni Ummi Hasanah, Sarungu, J.J Mulyanto, Soesilo, A.M Suparjito,
spellingShingle	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
author_facet	Erni Ummi Hasanah, Sarungu, J.J Mulyanto, Soesilo, A.M Suparjito,
author_sort	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
publisher	Penerbit Universiti Kebangsaan Malaysia
publishDate	2019
url	http://journalarticle.ukm.my/14127/ http://journalarticle.ukm.my/14127/ http://journalarticle.ukm.my/14127/1/jeko_53%282%29-13.pdf
first_indexed	2023-09-18T20:06:24Z
last_indexed	2023-09-18T20:06:24Z
_version_	1777407187346259968

The effect of intervening variable towards twin deficit in Indonesia: the application of path analysis

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