We adopt the definition of sustainability as “non-declining welfare per capita”, and measure genuine savings and change in wealth per capita as indicator of weak sustainability. The results suggests that the overall trend in sustainability as measured by changes in wealth per capita had shown that the Indonesian economy during the last twenty years had not been on a sustainable path. Despite this, sustainability had been on an improving long-run trend due to the restructuring of the economy away from oil and gas sector, towards more reliant on secondary and tertiary economic activities. However, the need for more appropriate approach in managing mineral, forest resources depletion, as well as environmental degradation caused by industrial sector’s pollution is called for as they had rapidly becoming a growing problem. Measures of sustainability during the economic crisis and its adjustment period clearly show that the crisis had adversely affected the positive trend in sustainability through a combination of reduction in savings rate and increases in natural resources depletion. This has rephrased the importance of economic growth in the context of sustainable development, and provided empirical evidence that economic crisis had created incentives for more rapid natural resources extraction that could endanger sustainable development. […]

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The paper outlines some alternative methodologies for estimating the monetary policy reaction function. It also discusses some of the advantages and disadvantages for each available alternative to be implemented in the case of small developing economies. Additionally, a simple case study using Indonesia’s data set was carried out. The result indicates that an estimated simple backward-looking reaction function is capable of capturing the path of policy instrument variable quite well. DOWNLOAD

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In many countries, especially in developing countries, the insufficient formal jobs drives people to look for non-formal job. The effect of this process stimulates informal sector. The problem of squatter appears as a cause of their activities then it creates externality that is congestion. Given this fact, we find that there is a strong relationship between the existence of informal sector activities and congestion. DOWNLOAD

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This paper attempts to investigate the level of relative technical efficiency, productivity and the role of regional characteristics on technical efficiency performance of firms in Indonesian’s light manufacturing industry. Data Envelopment Analysis, Malmquist Productivity Index and regression analysis are used on BPS’s secondary data of 3364 establishment during 1995-1997. Empirical results show that average technical efficiency had been low and the decline of technical efficiency was occurred. Considerable productivity growth was found in most of industrial sectors, but it was mainly accomplished through technical progress rather than efficiency improvement. Regression analyses indicate that the level of technical efficiency was influenced by regional characteristics, where industrial specialization, competition and urban size had positive impacts. The present of industrial knowledge spillovers between industries and from foreign direct investment was not supported by the empirical estimation. Empirical results also shows that foreign owned firms dan medium scale firms were more likely to have higher level of relative technical efficiency. DOWNLOAD

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