PANDEMIC SHOCKS AND MACRO-FINANCIAL POLICY RESPONSES: AN ESTIMATED DSGE-VAR MODEL FOR INDONESIA

Advis Budiman; Sugiharso Safuan; Solikin M. Juhro; Febrio N. Kacaribu

doi:10.21098/bemp.v25i3.1981

PANDEMIC SHOCKS AND MACRO-FINANCIAL POLICY RESPONSES: AN ESTIMATED DSGE-VAR MODEL FOR INDONESIA

Advis Budiman
, Sugiharso Safuan
, Solikin M. Juhro
, Febrio N. Kacaribu

Department of Economics

Research output: Contribution to journal › Article › peer-review

2 Citations (Scopus)

Abstract

This paper attempts to investigate the impact of policy mix in dealing with the COVID-19 pandemic. We employ the New Keynesian Dynamic Stochastic General Equilibrium (DSGE) framework and the Del Negro et al. (2007) approach to estimate the model. We investigate the effectiveness of policy mix in Indonesia by taking into account real and financial linkages, as well as other market imperfections. We intend to analyze and evaluate the adequacy of monetary, fiscal, and macroprudential policy by simulating each policy option using Indonesian-specific factors and comparing them. Our findings show that policy mix has a greater impact on accelerating economic recovery but does not necessarily lead to anchor inflation.

Original language	English
Pages (from-to)	399-438
Number of pages	40
Journal	Buletin Ekonomi Moneter dan Perbankan/Monetary and banking economics bulletin
Volume	25
Issue number	3
DOIs	https://doi.org/10.21098/bemp.v25i3.1981
Publication status	Published - 2022

UN SDGs

This output contributes to the following UN Sustainable Development Goals (SDGs)

SDG 10 Reduced Inequalities

Keywords

Financial frictions
General equilibrium
Policy mix

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10.21098/bemp.v25i3.1981

Cite this

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abstract = "This paper attempts to investigate the impact of policy mix in dealing with the COVID-19 pandemic. We employ the New Keynesian Dynamic Stochastic General Equilibrium (DSGE) framework and the Del Negro et al. (2007) approach to estimate the model. We investigate the effectiveness of policy mix in Indonesia by taking into account real and financial linkages, as well as other market imperfections. We intend to analyze and evaluate the adequacy of monetary, fiscal, and macroprudential policy by simulating each policy option using Indonesian-specific factors and comparing them. Our findings show that policy mix has a greater impact on accelerating economic recovery but does not necessarily lead to anchor inflation.",

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doi = "10.21098/bemp.v25i3.1981",

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AU - Kacaribu, Febrio N.

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AB - This paper attempts to investigate the impact of policy mix in dealing with the COVID-19 pandemic. We employ the New Keynesian Dynamic Stochastic General Equilibrium (DSGE) framework and the Del Negro et al. (2007) approach to estimate the model. We investigate the effectiveness of policy mix in Indonesia by taking into account real and financial linkages, as well as other market imperfections. We intend to analyze and evaluate the adequacy of monetary, fiscal, and macroprudential policy by simulating each policy option using Indonesian-specific factors and comparing them. Our findings show that policy mix has a greater impact on accelerating economic recovery but does not necessarily lead to anchor inflation.

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KW - General equilibrium

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IS - 3

ER -

PANDEMIC SHOCKS AND MACRO-FINANCIAL POLICY RESPONSES: AN ESTIMATED DSGE-VAR MODEL FOR INDONESIA

Abstract

UN SDGs

Keywords

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