Sector-Specific and Spatial-Specific Multipliers in Indonesian Economy: World Input-Output Analysis

Muchdie Muchdie, M Nurrasyidin

DOI: https://doi.org/10.23917/jep.v19i1.5661

Abstract

This article discusses on sectoral-specific and spatial-specific multipliers in Indonesian economy using 6-country-30 sector input-output tables for the year 2000, 2005, 2010 and 2014. The result shows that firstly, in all years, there were 20 sectors with total output multipliers more than 2. Flow-on effects were higher than initial effects. These sectors should be prioritized if increasing of total output is the objective of Indonesian economic development as total output will be created with less intial efforts.  Secondly, in the year of 2000, average percentage of multipliers occurred in own-sector was 56.23 per cent, and increase slightly in 2005 (57.38%) dan 2010 (58.93%), but decrease in 2014 (57.98%). Correlation between total output multipliers and percentage of multipliers occurred in other-sector was positive and very strong. The higher total output multipliers, the higher percentage of multipliers occurred in other-sector. Thirdly, in the year of 2000, average percentage of multipliers occurred in other-countries was 21.34 per cent and decrease slightly in 2005 (20.22%) and 2010 (18.14%), but increase in 2014 (20.55%). Correlation between total output multipliers and percentage of multipliers occurred in other-countries were positive and very strong. The higher total output multipliers, the higher multipliers occurred in other-countries. 

Keywords

total multipliers, sector-specific multipliers, spatial-specific multipliers

Full Text:

PDF

References

Adhi, A. (2015). 80 Persen Industri Indonesia Disebut Dikuasai Swasta. Retrieved from http://surabaya.tribunnews.com/2015/03/03/80-persen-industri-indonesia-disebut-dikuasai-swasta.

Ahiakpor, J.C.W. (2000). Hawtrey on the Keynesian Multiplier: A Question of Cognitive Dissonance? History of Political Economy, 32 (4): 889-908.

Beemiller, R.M. (1990). Improving Accuracy by Combining Primary Data with RIMS: Comment on Bourque, International Regional Science Review, 13 (1-2): 99-101.

Burda, W. (2005). Macroeconomics: A European Text, Fourth Edition, Oxford University Press.

Coughlin, C. and Mandelbaum, T.B. (1991). A Consumer's Guide to Regional Economic Multipliers, Federal Reserve Bank of St. Louis Review, January/February 1991:19-32.

Grady, P. and Muller, R. A. (1988). On the use and misuse of input-output based impact analysis in evaluation, The Canadian Journal of Program Evaluation, 2 (3): 49-61.

Hall, R. E. (2009). By How Much Does GDP Rise if the Government Buys More Output? NBER Working Paper 15496, National Bureau of Economic Research. Retrieved from: http://www.nber.org/papers/w15496.pdf?new_window=1

Harris, P. (1997). Limitations on the use of regional economic impact multipliers by practitioners: An application to the tourism industry, The Journal of Tourism Studies, 8(2): 1-12.

Hughes, D. W. (2003). Policy uses of economic multipliers and impact analysis, Choices Publication of the American Agricultural Economics Association, Second Quarter. Retrieved from: http://www.choicesmagazine.org/2003-2/2003-2-06.htm

Isard, W. (1951). Inter-regional and Regional Input-Output Analysis: A Model of a Space-Economy, Review of Economics and Statistics, 33(4): 318-328.

Jensen, R.C. Mandeville, T.D. & Karunaratne, N.D. (1979). Regional Economic Planning: Generation of Regional Input-Output Analysis, Croom Helm, and London.

Kahn, R. (1931). The Relation of Home Investment to Unemployment, Economic Journal, 41(162):173-198. http://dx.doi.org/10.2307/2223697

Krugman, P. and Wells, R. (2009). Economics, Worth Publisher, Duffield, UK.

Leontief, W.W. (1951). The Structure of American Economy 1919-1939, Second Edition, Harvard University Press, Cambridge.

Mankiw, N.G. (2008). Macroeconomics, Eight Edition, South-Western Publishing, Ohio, the USA.

Mills, E. C. (1993). The Misuse of Regional Economic Models, Cato Journal, 13(1): 29-39.

Miller, R. and Blair, P. (1985). Input-Output Analysis – Foundations and Extensions, Prentice-Hall, Englewood Cliffs, New Jersey.

Moore, F.T. and Petersen, J. (1955). Regional Analysis: An Inter-industry Model of Utah, Review of Economics and Statistics, 37: 368-383.

Oosterhaven, J., & Stelder, D. (2007), Regional and Interregional IO Analysis, Faculty of Economics and Business University of Groningen, the Netherlands, Retrieved from https://www.rug.nl/research/reg/research/ irios/download/regional-io-analysis.pdf.

Pindyck, R., and Rubinfeld, D. (2012). Macroeconomics. The Pearson Series in Economics, 8th Edition, ISBN13:978-0132857123, ISBN-10: 013285712X

Richardson, H.W. (1985). Input-Output and Economic Base Multipliers: Looking Backward and Forward, Journal of Regional Science, 25 (4): 607-661.

Siegfried, J., Allen R., Sanderson, A.R., and McHenry, P. (2006). The Economic Impact of Colleges and Universities, Working Paper No. 06-W12, Retrieved from http://www.accessecon.com/pubs/VUECON/vu06-w12.pdf.

Tiebout, C.M. (1956). A Pure Theory of Local Expenditures. The Journal of Political Economy, 64(5): 416-424.

Timmer, M. P., Los, B., Stehrer, R., and de Vries, G. J. (2016). An Anatomy of the Global Trade Slowdown based on the WIOD 2016 Release, GGDC Research Memorandum Number 162, University of Groningen, retrieved from

http://www.ggdc.net/ publications/memorandum/gd162.pdf.

Timmer, M.P., Dietzenbacher, E., Los, B., Stehrer, R., & de Vries, G.J. (2015). An Illustrated User Guide to the World Input–Output Database: the Case of Global Automotive Production. Review of International Economics, 23(3), 575–605. DOI:10.1111/roie.1217.

Trinh, B., Hoa, P. L., and Giang, B.C. (2008). Import multiplier in input-output analysis. Depocen Working Paper Series No. 2008/23.

West, G.R. (1990). Regional Trade Estimation: A Hybrid Approach. International Regional Science Review, 13 (1&2), 103-118.

Worldbank. (2017). The World Bank In Indonesia: Having Maintained Political Stability, Indonesia is one of Asia Pasific’s Most Vibrant Democracies and Is Emerging as a Confident Middle-Income Country. Retrieved from http://www.worldbank.org/en/country/indonesia/overview.

Article Level Metrics

Refbacks

  • There are currently no refbacks.