Exploring the Indonesian Economic Landscape and Structural Change

Muhammad Firdaus • Budi Kurniawan • Sri Mulatsih
Journal article Journal of Indonesian Economy and Business • January 2012


In assessing the economic impact of a sector or a group of sectors on a single or multiregional economy, input-output analysis has been proven to be a popular method.This paper explores the degree of structural change of the Indonesian economy using the input-output frame work. It examines how linkages among economic sectors have evolved from 1971-2008 and identifies which economic sectors exhibited the highest inter-sectoral linkages. The study finds that manufacturing consistently becomes the key sector in the Indonesian economy. Indonesian cannot afford to leapfrog the industrialization stage and largely depend on a service-oriented economy when the potential for growth still lies primarily in manufacturing. The graphical presentation of inter-industry relationship through the “Multiplier Product Matrix” (MPM) and its associated “economic landscape” provides a visualization of the Indonesian economic landscape for selected years and how it has changed over time.




Journal of Indonesian Economy and Business

The Journal of Indonesian Economy and Business (JIEB) disseminates research results on the Indone... see more