Following the acquisition of its sovereignty from the Netherlands in 1949, Indonesia experienced serious economic and political problems during the 1950s and 1960s, before entering a three-decade-long period of rapid economic growth. Hard-hit by the financial crisis of the late 1990s, Indonesia undertook a wide range of economic and financial reforms. These reforms served to prepare it well for the 2007-08 global financial crisis, through which Indonesia passed relatively unscathed.
Drawing on empirical research, this book presents a comprehensive empirical study on the key macroeconomic relations and monetary policy issues in Indonesia. The book analyses monetary, fiscal and exchange-rate policies, looking at their interactions and impacts on the economy. It demonstrates how important macroeconomic management for monetary and financial stability is to sustained national economic growth and development.
Data from the 1970s is compared and contrasted with 1950s data to analyse macroeconomic policies and issues in an historical context. Statistical and econometric techniques are juxtaposed with general empirical results to supplement informative discussion of macroeconomic and monetary developments. This book is a useful contribution to studies on macroeconomics and international development, as well as Southeast Asian studies.
"The book presents comprehensive empirical research on the key macroeconomic relations and monetary policy issues in Indonesia… Most chapters in the book are self-contained and can be independently studied." -Siwage Dharma Negara; Journal of Southeast Asian Economics, Vol. 30, No. 1, April 2013.
1. Introduction 2. Macroeconomic Developments, Policies and Issues: An Historical Overview from a Political Economy Perspective Part 1: Sources of Economic Growth and Household Consumption Behaviour 3. Sources of Economic Growth 4. Household Consumption Behaviour Part 2: Inflation and Inflation Uncertainty 5. Sources and Dynamics of Inflation 6. Inflation and Inflation Uncertainty 7. Monetary Policy and Stability of the Narrow Money-Demand Function Part 3: Exports, Imports and Real Exchange Rates 8. Export Trends, Structure and Determinants 9. Import Trends, Structure and Determinants 10. Determinants of the Real Exchange Rate Part 4: Monetary and Fiscal Policy 11. Exchange Rates, Capital Flows and Monetary Policy 12. Inflation Targeting: As Assessment of Design, Conduct and Performance 13. Fiscal Policy and Sustainability