REVISITING KEYNES’ INVESTMENT AND SAVING MODEL IN INDONESIA
This study aims to analyze the Keynes’ investment and saving model in Indonesia from 1981 to 2018. The researchers use the econometric test from the Granger causality test to find the short-run causal relationship and the Vector Error Correction Model to reveal both the short-run and long-run effec...
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| Format: | Article |
| Language: | English |
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Faculty of Economics, University of Tuzla
2020-11-01
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| Series: | Economic Review |
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| Online Access: | http://er.ef.untz.ba/index.php/er/article/view/69 |
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| author | Cheng-Wen Lee Andrian Dolfriandra Huruta Ramdani Putri Setyaningrum Gatot Sasongko |
| author_facet | Cheng-Wen Lee Andrian Dolfriandra Huruta Ramdani Putri Setyaningrum Gatot Sasongko |
| author_sort | Cheng-Wen Lee |
| collection | DOAJ |
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This study aims to analyze the Keynes’ investment and saving model in Indonesia from 1981 to 2018. The researchers use the econometric test from the Granger causality test to find the short-run causal relationship and the Vector Error Correction Model to reveal both the short-run and long-run effects in the model. The result of Granger causality test demonstrates that there is no short-run causal relationship between these two variables. In the short-run, the increase in saving affects the consumption loans more compared to the investment loans. Besides, increased consumption compared to saving has more influence in raising investment. However, the Vector Error Correction Model proves that saving negatively affects investment in the long-run. This model empirically supports the long-run Keynes’ investment and saving model. Consequently, the Indonesian government needs to consider saving as a policy instrument to increase investment in the long-run.
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| format | Article |
| id | doaj-art-1e6d4a49c7aa45c7869c78981b4ceae9 |
| institution | Kabale University |
| issn | 1512-8962 2303-680X |
| language | English |
| publishDate | 2020-11-01 |
| publisher | Faculty of Economics, University of Tuzla |
| record_format | Article |
| series | Economic Review |
| spelling | doaj-art-1e6d4a49c7aa45c7869c78981b4ceae92025-02-10T00:30:53ZengFaculty of Economics, University of TuzlaEconomic Review1512-89622303-680X2020-11-01182REVISITING KEYNES’ INVESTMENT AND SAVING MODEL IN INDONESIACheng-Wen Lee0Andrian Dolfriandra Huruta1Ramdani Putri Setyaningrum2Gatot Sasongko3Department of International Business, Chung Yuan Christian University, TaiwanPhD Program in Business, Chung Yuan Christian University, Taiwan & Faculty of Economics and Business, Satya Wacana Christian University, Indonesia,Faculty of Economics and Business, Satya Wacana Christian University, IndonesiaFaculty of Economics and Business, Satya Wacana Christian University, Indonesia This study aims to analyze the Keynes’ investment and saving model in Indonesia from 1981 to 2018. The researchers use the econometric test from the Granger causality test to find the short-run causal relationship and the Vector Error Correction Model to reveal both the short-run and long-run effects in the model. The result of Granger causality test demonstrates that there is no short-run causal relationship between these two variables. In the short-run, the increase in saving affects the consumption loans more compared to the investment loans. Besides, increased consumption compared to saving has more influence in raising investment. However, the Vector Error Correction Model proves that saving negatively affects investment in the long-run. This model empirically supports the long-run Keynes’ investment and saving model. Consequently, the Indonesian government needs to consider saving as a policy instrument to increase investment in the long-run. http://er.ef.untz.ba/index.php/er/article/view/69investmentsavingvector error correction modelGranger causality |
| spellingShingle | Cheng-Wen Lee Andrian Dolfriandra Huruta Ramdani Putri Setyaningrum Gatot Sasongko REVISITING KEYNES’ INVESTMENT AND SAVING MODEL IN INDONESIA Economic Review investment saving vector error correction model Granger causality |
| title | REVISITING KEYNES’ INVESTMENT AND SAVING MODEL IN INDONESIA |
| title_full | REVISITING KEYNES’ INVESTMENT AND SAVING MODEL IN INDONESIA |
| title_fullStr | REVISITING KEYNES’ INVESTMENT AND SAVING MODEL IN INDONESIA |
| title_full_unstemmed | REVISITING KEYNES’ INVESTMENT AND SAVING MODEL IN INDONESIA |
| title_short | REVISITING KEYNES’ INVESTMENT AND SAVING MODEL IN INDONESIA |
| title_sort | revisiting keynes investment and saving model in indonesia |
| topic | investment saving vector error correction model Granger causality |
| url | http://er.ef.untz.ba/index.php/er/article/view/69 |
| work_keys_str_mv | AT chengwenlee revisitingkeynesinvestmentandsavingmodelinindonesia AT andriandolfriandrahuruta revisitingkeynesinvestmentandsavingmodelinindonesia AT ramdaniputrisetyaningrum revisitingkeynesinvestmentandsavingmodelinindonesia AT gatotsasongko revisitingkeynesinvestmentandsavingmodelinindonesia |