Macroeconomic Policies, Crises, and Long-term Growth in Indonesia, 1965-90

Wing Thye Woo, Bruce Glassburner, Anwar Nasution

World Bank Publications, Jan 1, 1994 - Business & Economics - 216 pages

Living Standards Measurement Studies Paper 104. The impact of children's health on their schooling success has been the focus of much research. While studies have concluded that there is a correlation between the health of the children and their performance at school, there is an increasing argument surrounding the limitations of the research. Many such studies measure schooling achievement through school attendance rates. This paper analyzes the failure of research to control for the fact that schooling and health are determined simultaneously. Such failure would lead to biased estimates. The study explores the possible biases and provides new evidence on the interrelationship between child health and schooling.

Contents

• The Indonesian Growth Experience 196590: 1
• A Profile of the Indonesian Economy: 5
• Human Resources: 6
• Ethnicity: 7
• Religion: 8
• StateOwned Enterprises: 9
• The Private Manufacturing Sector: 10
• The Role of Economic Planning: 11
• The Foreign Debt Situation: 13
• The Jakarta Stock Market: 17
• Informal Credit: 18
• The Labor Market: 19
• Agricultural Markets: 23
• The Chaotic Years 194965: 24
• 195965: 26
• An Overview of Macroeconomic Developments 196590: 29
• The Inflation of 197273: 31
• The Pertamina Crisis of 1975: 32
• Adjusting to Low Oil Prices 198290: 33
• The Political Economy of Policymaking in the New Order Government: 35
• The Variables in the Economic Policymaking Equation: 36
• Political Interests and the Decisionmaking Process: 40
• The First Crisis Restoring Stability and Growth: 42
• Stabilization and Rehabilitation 196670: 45
• Managing External Resource Flows: 46
• Trade and Exchange Rates: 48
• Monetary and Fiscal Reforms: 49
• The Effectiveness of the Stabilization Program: 51
• The Second Crisis The Pertamina Affair: 54
• The Pertamina Crisis: 57
• Pertamina Is Brought under Control: 62
• Impact of the Pertamina Crisis on External Borrowing: 64
• Impact of the Pertamina Crisis on ShortTerm Macroeconomic Performance: 67
• Conclusion: 72
• The Third Crisis The Dutch Disease: 73
• The Basic Theory of the Dutch Disease: 74
• The Transmission Mechanisms of the Oil Boom: 77
• The Link between Monetary Control and the Dutch Disease: 79
• Documenting the Dutch Disease: 82
• The Decision to Devalue: 85
• The Efficacy of the Devaluation: 87
• Monetary Policy After the Devaluation: 93
• An Assessment of the 1978 Devaluation: 96
• The Fourth Crisis Negative External Shocks in the 1980s: 97
• Invoking Efficiency on the Slippery Slope: 98
• Reducing State Expenditures to Cope with Revenue Shortfall: 99
• Consequences of Financial Repression: 100
• The 1983 Financial Market Reforms: 103
• The 198890 Financial Reform Packages: 105
• Mobilizing Public Resources: 107
• The Tax Reforms: 108
• A Serious Remaining Problem in Public Resource Mobilization: 109
• Management of the Exchange Rate: 110
• The September 1986 Devaluation: 111
• Was Revenue Enhancement the Motivation for Devaluation?: 112
• The Proliferation of Import Licensing 198285: 113
• TradeLiberalizing Measures 198690: 115
• The Economic Response to the Devaluations and Trade Deregulation: 117
• The Impact of Macroeconomic Policies on Growth: 118
• The Relevant Questions for Indonesia: 119
• The Indonesian Growth Record: 120
• Sectoral Performance: 121
• The Growth Implications of the 1966 Stabilization Program: 123
• The Growth Implications of the Pertamina Affair and the 1978 Devaluation: 124
• The Growth Implications of the Structural Adjustment Program of the 1980s: 127
• Assessing Fiscal and Monetary Policy during the Oil Boom: 131
• Indonesia at the Crossroad: 139
• Summary and Conclusions: 143
• Policy Mistakes: 146
• Corrective Actions: 147
• Enhanced Economic Management: 148
• Four General Theoretical Issues: 149
• Notes: 151
• Appendix: 157
• Bibliography: 203
• Index: 213

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Bibliographic information

• Title: Macroeconomic Policies, Crises, and Long-term Growth in Indonesia, 1965-90; Occasional Papers in Swiss Studies; World Bank comparative macroeconomic studies; World Bank e-Library
• Authors: Wing Thye Woo, Bruce Glassburner, Anwar Nasution
• Publisher: World Bank Publications, 1994
• ISBN: 0821322125, 9780821322123
• Length: 216 pages
• Subjects: Business & Economics / General