Impact of a Lower Oil Subsidy on Indonesian Macroeconomic Performance, Agricultural Sector and Poverty Incidences (A Recursive Dynamic Computable General Equilibrium Analysis)

Abstract

This research is directed to examining the impact of the fiscal policies on macroeconomic variables, the performance of the agricultural sector and the income distribution or welfare of low-income households. Specifically, the objectives of the research are to analyse the impacts of the fiscal policies - in particular fuel and fertiliser subsidies - on the performance of economic sectors, particularly agricultural sectors, in terms of production, capital accumulation, employment absorption, wages, price forms, income distribution and also on the poverty incidence. The analysis will be made using a sequentially dynamic CGE model with GAMS software.