THE DYNAMIC OF INDONESIA'S SECTORAL ECONOMIC CYCLES

Abstract

The purpose of this study is to observe the dynamics of Indonesia's economic cycles for six main sectors. In constructing the cycles, we use quarterly Gross Domestic Product (GDP) for six Indonesian sectors over the period 2000-2021. We obtain the economic cycles for each of the six sectors using the Hodrick-Prescott filter and the Christiano- Fitzgerald filter techniques. We find evidence that five of six sectors have relatively strong correlation with the aggregate GDP growth cycle. Additionally, by using the concordance index, we further conclude that three sectors are pro-cyclical with the aggregate GDP growth cycle.