The 3rd International Conference Community Research and Service Engagements, IC2RSE 2019, 4th December 2019, North Sumatra, Indonesia

Research Article

Effectiveness of Fiscal Policies in Controlling Inflation in Indonesia with the Seemingly Unrelated Regression Model

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  • @INPROCEEDINGS{10.4108/eai.4-12-2019.2293801,
        author={Lia Nazliana Nasution and Ade  Novalina and Dede  Ruslan},
        title={Effectiveness of Fiscal Policies in Controlling Inflation in Indonesia with the Seemingly Unrelated Regression Model},
        proceedings={The 3rd International Conference Community Research and Service Engagements, IC2RSE 2019, 4th December  2019, North Sumatra, Indonesia},
        publisher={EAI},
        proceedings_a={IC2RSE},
        year={2020},
        month={4},
        keywords={fiscal policy inflation indonesia},
        doi={10.4108/eai.4-12-2019.2293801}
    }
    
  • Lia Nazliana Nasution
    Ade Novalina
    Dede Ruslan
    Year: 2020
    Effectiveness of Fiscal Policies in Controlling Inflation in Indonesia with the Seemingly Unrelated Regression Model
    IC2RSE
    EAI
    DOI: 10.4108/eai.4-12-2019.2293801
Lia Nazliana Nasution1,*, Ade Novalina1, Dede Ruslan2
  • 1: Doctoral Students in Economics Universitas Sumatera Utara
  • 2: Economics Lecturer Universitas Negeri Medan
*Contact email: lianazliana@dosen.pancabudi.ac.id

Abstract

The purpose of this study is to see how effective fiscal policy in controlling inflation in Indonesia. The fiscal policy variables used are tax revenue, government spending, and foreign direct investment (FDI). The data used are secondary data types ranging from 1982 to 2018. Based on the results of research using the Seemingly Unrelated Regression (SUR) model, shows that fiscal policy variables measured through tax revenues, FDI, and government spending have a significant effect on the development of the inflation in Indonesia. Tax revenue is having a substantial impact on government spending. Likewise, FDI has a significant impact on the money supply in Indonesia during the observation