Modeling the importance of financial liberalisation to Indonesia’s economic growth

Crawford School of Public Policy | Arndt-Corden Department of Economics

Event details

PhD Seminar (Econ)

Date & time

Friday 17 May 2019


Seminar Room 1, #132, Crawford Building, Lennox Crossing, The ANU


Krisna Gupta, Crawford School of Public Policy

Indonesia has been struggling to return to its pre-Asian Financial Crisis growth rate. The latest development roadmap, dubbed “Making Indonesia 4.0”, aims to exploit high-tech manufacturing in order to pursue export-oriented growth. Realising the needs for external finance and technology, the government is trying to formulate more liberalised investment policies for both portfolio investment and direct investment. In this seminar, the potential gains to the Indonesian economy will be illustrated using a version of the Global Trade Analysis Project (GTAP) model that has been extended to consider variations in the cost of capital. The results suggest that a plausible reduction in the cost of capital translates to sizeable increases in capital investments and Indonesia’s gross domestic product.

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