Issue on agricultural subsidy in Indonesia :: A computable general equilibrium modeling

NUGROHO, Petrus Setiyo Hari, Ryuta Ray Kato

2009 | Tesis | S2 Magister Ekonomika Pembangunan

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This paper examines the impacts of agricultural subsidy policy to the Indonesia economy. A Computable General Equilibrium (CGE) modeling is utilized to formulate some simulations in order to provide estimations on the economic condition if a certain government policy is implemented. Furthermore, a three-sector disaggregation of Social Accounting Matrix derived from Input-Output table of Indonesia in 2005 is employed as the data for running the CGE modeling. This study concludes that higher subsidy level may generate drawbacks to the economy; therefore, careful consideration should be taken into account in determining the appropriate level of subsidy policy for agricultural sector.

Kata Kunci : Agricultural sector,Subsidy policy,Computable general equilibrium,Policy analysis