Abstract:This paper examines the links between fiscal policy and terms-of-trade movement in the case of Indonesia over the period 2001-13. Unlike other researchers, this paper explores both the rules-based and discretionary fiscal policies. The earlier factor covers deficit rule and debt rule which are intended to measure the fiscal policy credibility. The later follows Fatás and Mihov (2003; 2006). The OLS estimation of quarterly data reveals that the less credible deficit rule policy and discretionary fiscal policy h… Show more
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