The Effect of Short-Term Aggregate Demand in Indonesian Economy: The Era of ASEAN Economic Community
The Effect of Short-Term Aggregate Demand in Indonesian Economy: The Era of ASEAN Economic Community

Summary/Abstract: This research aims to see the interaction of the aggregate demand variables such as consumption, investment, government spending, exports and imports in influencing the economy in Indonesia that entered the era of the free market, generally refers to ASEAN Economic Community. The data used is secondary data obtained from the Central Statistics Agency in the period of 2000-2013. Quantitative approach is used as analysis method using simultaneous equation through the estimation of twostage least square (TSLS). The results of the study show that consumption, investment, government spending, exports and imports affect the national income significantly. Proportionally, household consumption and investment still has the dominant proportion and greater influence on the national income compared to other macro variables. Meanwhile, the government expenditure is positively and significantly influences the investment in Indonesia. This indicates that the increase in exports can be affected by the amount of investment flow to in Indonesia and vice versa, while the increase in imports is influenced by the amount of national income, especially on the proportion of the level of household consumption.

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