ANALISIS PENGARUH UTANG PEMERINTAH TERHADAP KONSUMSI MASYARAKAT DALAM PARADIGMA RICARDIAN EQUIVALENCE DI INDONESIA (PERIODE 2010Q1-2017Q4)

Abstract

Private consumption is funded by the amount of income that received. In any ciscumstances which the national income is insufficiecnt for cunsumption will encourage government to obtain financial source, one of it is withdrawal of foreign fund in the form of government debt. The government debt has been known for having positive and negative impact towards private consumption, On the other hand, in Ricardian Equivalence Hypothesis state that currecnt government debt is equivalent to the incrase of tax in the future. This study aims to analyze wether government foreign debt has impact on private consumption. In addition, this paper also uses Gross Domestic Product (GDP), Inflation and interest rate of time deposits as other factors effecting consumption. The approach used in this research is Error Correction Models (ECM) with time series data 2010Q1-2017Q4 from Bank Indonesia. The result of this research show that in short-term government foreign debt has no significant effect on consumption, meaning Ricardian Equivalence can not be rejected in short term. Meanwhile, in long-term government foreign debt has positive and significant impact on private consumption, indicating Keynesian perspective can be observed in the long run. This signification also shown in inflation where inflation has no impact on private consumption in short-run but has negative and significance effect in long-run. The other variabel, Gross Domestic Product and interest rate of time deposits have positive and significant impact to private consumption both in short and long-term in the Indonesian economy for period 2010Q1-2017Q4