INDONESIA'S TWO-DIMENSIONAL MACROECONOMIC MODEL

• Main Author: Irianto, Michael
• Format: Final Project
• Language: Indonesia
• Online Access: https://digilib.itb.ac.id/gdl/view/38877
• Institution: Institut Teknologi Bandung

Nowadays, macroeconomic analysis is needed to predict the economic conditions of a country in the future. This is important because by predicting economic conditions, a country can develop economic policies that must be implemented so that economic conditions reach the target. Therefore, a model that can describe the economic conditions of a country must be developed. In this final project, a two-dimensional macroeconomic model of Indonesia will be built in which the relationship between debt and income from Indonesia will be reviewed with various macroeconomic elements. The model is built using deterministic and stochastic methods. For deterministic models, models will be built with the help of systems of differential equations. Next, parameter will be estimated using Spiral Optimization Algorithm. For stochastic model, model will be built using Vector Autoregression (VAR). The numerical results show that the stochastic model is better for describing the condition of the Indonesian economy than the deterministic model. However, to predict Indonesia's economic conditions in the future, stochastic models will produce predictive results that are less accurate for a long period of time.