ABSTRACT
LISHIA RACHMAWATI. The Effect of Credibility of Fiscal Policy on Economic Growth in Indonesia. Education of Cooperative Economics,Faculty of Economics, State University of Jakarta, in 2016.
The objective of this study is to investigate whether the effects of credibility of fiscal policy, in the form of deficit rule, debt rule, discretionary, and openness to economic growth in Indonesia. The method used in this study is in the form of time series and in the form of quartly of the year 2001(1)-2013(4) with a sample of 52 points. The data used are taken from The Central Bank of Indonesia (www.bi.go.id), Central Board of Statistics (www.bps.go.id), and the Ministry of Finance (www.djpu.kemenkeu.go.id). This study applies Ordinary Least Square (OLS) model and Auto Regressive Distributed Lag (ARDL) model. By using Eviews 8 program, the results showed that the credibility of fiscal policy in the model deficit rule in the short term and the long term does not significantly affect the economic growth and declared not credible. And the model debt rule in the short-term significantly affect the economic growth with a positive and in the long term can stabilize economic growth. Then to a variable discretionary fiscal policy and economic opening of the real sector in the short term and the long term does not significantly affect the economic growth.
Keywords: Credibility Deficit Budget Rules,Credibility Debt Rules, Fiscal Policy Discretion, Openness, and Economic Growth
