Tax cuts in Indonesia lead to economic growth, but at what cost?
The article examines how changes in taxes and government spending in Indonesia affect the economy. They used a special model to analyze the data from 2000 to 2009. The results show that when taxes go up, the economy slows down, but when the government spends more money, the economy gets a boost in the short term. Taxes also affect prices, while government spending affects interest rates. Taxes are especially important for explaining changes in the economy, and both fiscal and monetary policies play a role in price changes. Overall, there is some evidence that fiscal and monetary policies interact, but it's not very strong.