This paper examines episodes of capital bonanzas and sudden stops in Indonesia by utilising binary response models and several episode-identification approaches. Our identification suggests that whenever bonanza episodes occurred, capital sudden stop episodes followed in a more extended period. The estimations demonstrate that domestic factors are relatively dominant in determining the capital bonanzas, and the federal funds rate has a more significant impact on inducing the probability of capital sudden stops in Indonesia. We also found that Turkey and South Africa are the most contagious economies for Indonesia. This paper proposes some policy reforms to enhance the stability of capital inflows in Indonesia, including financial regulation and public finance policies such as a reverse Tobin tax and market-driven public debt rules.

In contrast to previous studies that mostly focused on the winners and losers of the US–China trade war, this study investigates the poverty and income distribution impact of the trade dispute in a developing country, using Indonesia as a case study. Employing a dynamic, computable general equilibrium model that is multi-region and multi-household, this study found that the trade war increases households’ real income and reduces poverty in Indonesia. The impact of the trade war, which is channeled into the Indonesian economy via trade diversion, improves the country’s terms of trade and eventually increases the returns of primary factors owned by households. However, Indonesia’s income inequality might increase as the rise in real income of upper-income households exceeds the rise in real income of lower-income households. The policy measures introduced by Indonesia to take advantage of the trade war might lower poverty incidence further and alter the impact of negative income distribution from the trade war.

Food price volatility broadly impacts the country’s food security. Rice price stabilization in Indonesia is carried out by BULOG, the food state-owned enterprise (SOE) that the WTO has identified as Indonesia’s state trading enterprise (STE). This study was conducted to evaluate the price stabilization program in Indonesia by reviewing the efforts that have been made and analyzing the factors that influence the price of rice at the consumer level using Autoregressive Distributed Lag (ARDL) analysis. The analysis showed that BULOG’s market share affected consumer-level rice prices with a negative coefficient sign, which means that the larger BULOG’s market share, the lower the price of rice will be. Other variables that affect the price of rice at the consumer level are the price of rice itself at the previous time lag, the producer-level paddy price, rice production, rice consumption, and BULOG’s operational rice stock. On the basis of the results of these studies, to realize the stabilization of rice prices in Indonesia, the government can complement stock management through a public policy approach with market-approach-based policies by optimizing the role of Food SOEs as market players in the rice industry.