The cyclicality of government expenditure in developing country: the case of Indonesia

Haryo Kuncoro ()

Economic Journal of Emerging Markets, 2014, vol. 6, issue 1, 23-37

Abstract: This paper analyzes the cyclicality and the relationship between government expenditure and output of Indonesia, 1999-2012 using Johansen co-integration test and the error correction model. The results confirm that in the short-run the government expenditure reveals counter-cyclical but pro-cyclical in the longrun. Output and government expenditure are co-integrated and it implies the existence of long-term relationship. The value of short-run elasticity coefficient for government expenditure is relatively high. In contrast, the long-run elasticity coefficient is lower and statistically greater than unity confirming the voracity hypothesis. Furthermore, there is no significant difference of government spending in good and bad times.

Keywords: Government; Expenditure; Cyclicality; Voracity; Elasticity (search for similar items in EconPapers)
Date: 2014
References: Add references at CitEc
Citations:

Downloads: (external link)
https://journal.uii.ac.id/JEP/article/view/3864/3435 (application/pdf)

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:uii:journl:v:6:y:2014:i:1:p:23-37:id:3864

Access Statistics for this article

Economic Journal of Emerging Markets is currently edited by Ana Yuliani

More articles in Economic Journal of Emerging Markets from Universitas Islam Indonesia
Bibliographic data for series maintained by Ana Yuliani ().