Abstract
The objectives of this paper are twofold. First, we construct a new interregional Computable General Equilibrium (CGE) model with three regions in Indonesia. This model is the interregional CGE model based on the 1995 Interregional Social Accounting Matrix (IRSAM). Second, we evaluate the impacts of tariff reduction and fiscal decentralization on these regional economies as well as on the entire Indonesian economy. Scenario 1 of the import tariff cut shows the tariff reduction reduces in tariff revenue and decreases in the imported goods price, but in industry activity, exports sectors such as the textile sector in Java benefits, while import competing sectors are more likely to suffer damage. From these scenarios of fiscal decentralization policy, we found that scenario 3 of decentralized government spending in Sumatra is better than Scenario 2 of more equal decentralized government spending in outer Java and Scenario 4 of more decentralized government spending in the rest of Indonesia for fiscal decentralization policies.
Sign-in/Register to access full text options 
Talk to us
Join us for a 30 min session where you can share your feedback and ask us any queries you have
Schedule a callDisclaimer: All third-party content on this website/platform is and will remain the property of their respective owners and is provided on "as is" basis without any warranties, express or implied. Use of third-party content does not indicate any affiliation, sponsorship with or endorsement by them. Any references to third-party content is to identify the corresponding services and shall be considered fair use under The CopyrightLaw.
