The Effects of import tariff reductions on Indonesia's manufacturing :: An evaluation through the CGE Model

SUTARJO, Bambang, Prof. Susumu Kuwahara

2010 | Tesis | S2 Magister Ekonomika Pembangunan

This paper examines the effects of tariff reductions on the manufacturing sector in Indonesia. Computable general equilibrium (CGE) modeling is utilized for this purpose. This paper simulates some government policy scenarios with respect to tariffs. Moreover, a nine-sector disaggregation of a Social Accounting Matrix derived from an Input-Output table of Indonesia 2008 provides data to run the CGE modeling. This study concludes that government should be careful in liberalizing their manufacturing sectors, depending on their objectives. In relation to society, a policy change is preferable for the society when it can improve welfare. On the government side, government can lose its revenue from tariff reductions.

Kata Kunci : Manufacturing,Computable equilibrium,Policy analysis