IDX Composite Index Set New Record, Best Day Since 1999

The Indonesia Stock Exchange (IDX) Composite Index set new record on Thursday, March 26th, 2020. It was the best day since June 8th, 1999. The index was up 10,19% and closed at 4,388.90 (via CNBC Indonesia).

Coronavirus Impact on U.S. Unemployment

Heidi Shierholz, Economic Policy Institute:
The data are last week’s initial unemployment insurance (UI) claims. Initial UI claims jumped from 211,000 three weeks ago to 282,000 two weeks ago to 3.3 million last week. That is nearly a 1,500% increase in two weeks. I have been a labor economist for a very long time and I have never seen anything like this.

Supreme Court Cancels BPJS Premium Price Increase

The Supreme Court of the Republic of Indonesia cancelled Social Security Administrative Body or Badan Penyelenggara Jaminan Sosial (BPJS) premium price increase. The court said that:
Article 34 paragraphs 1 and 2 of Presidential Regulation No. 75 Year 2019 concerning Amendment to Presidential Regulation No. 82 Year 2018 concerning Health Insurance does not have binding legal force.

Oil War

Saudi Arabia kicked off an all-out oil war on Saturday, slashing official pricing for its crude and making the deepest cuts in at least 20 years on its main grades, in a bid to push as many barrels into the market as possible.
The cuts in monthly pricing by state producer Saudi Aramco are the first indication of how the Saudis will respond to the breakup of the alliance between OPEC and partners like Russia.
Indonesia Minister of Finance Sri Mulyani Indrawati said that the decline in oil prices can decrease Pertamina burden for its imports since Indonesia oil imports are quite large. "It will later be seen in the government's balance sheet," she added. But, she also worried about its effect in the capital market.

Indonesia's Reserve Assets February 2020

It was down USD 1.3 billion from the previous month. Bank Indonesia press release on Friday, Mar 6th:
Indonesia's official reserve assets stood at USD130.4 billion as of end-February 2020, remained high despite lower than USD131.7 billion as of end-January 2020. The position of official reserve assets was equivalent to finance 7.7 months of imports or 7.4 months of imports and servicing government’s external debt, which is well above the international adequacy standard of three months imports. Bank Indonesia considers that the official reserve assets position was able to support the external sector resilience and maintain macroeconomic and financial system stability. The decline of official reserve assets in February 2020 was influenced by the government’s external debt payments, amongst others. Moving forward, Bank Indonesia views that the official reserve assets remain adequate, supported by the stability and solid domestic economic outlook.

Citing Wikipedia

To my surprise, I found that a NBER Working Paper cited Wikipedia as a source. One of my college lecturer once told me that I should not use Wikipedia as a reference in academic paper. Even, Wikipedia itself has a page about Citing Wikipedia:
We advise special caution when using Wikipedia as a source for research projects. Normal academic usage of Wikipedia and other encyclopedias is for getting the general facts of a problem and to gather keywords, references and bibliographical pointers, but not as a source in itself. Remember that Wikipedia is a wiki. Anyone in the world can edit an article, deleting accurate information or adding false information, which the reader may not recognize. Thus, you probably shouldn't be citing Wikipedia.
If an article in NBER starting to use Wikipedia, can we also cite it in our paper?

Spanish Flu Pandemic

It was 1918. At least 50 millions people killed by the flu worldwide. Nicholas Kristof, The New York Times:
Sports events were canceled. Theaters closed. Shaking hands was made illegal in Prescott, Ariz. Philadelphia hurriedly set up six more morgues. Families put crepe paper on doorways to signal a death inside — and crepe was everywhere.
We hope that coronavirus will not be the next one.

Purpose of Economic Model: Simulating or Forecasting?

Dimitri Zenghelis, LSE Grantham Research Institute:
An economic model is essentially a simplified framework for describing the workings of the economy. It exerts the discipline of forcing the modeller to formally articulate assumptions and tease out relationships behind those assumptions. Models are used for two main purposes: simulating (e.g. how would the world change relative to some counterfactual if we assume a change in this or that variable) and forecasting (e.g. what the world might look like in 2030). Economic models are great tools for simulations – given what we know about the behavioural workings of the economy, and taking these mostly as given, how might the economy respond to, say, an energy price spike? But models are much less effective at providing forecasts precisely not least because when making forecasts, very little can be taken as given. The further out the forecast, the larger the structural uncertainties making model projections at best illustrative, especially when trying to forecast the impact of non-marginal impulses such as climate change impacts or the transformation of the global energy system.
If economic model can be used for forecasting, why economists failed to predict disruptive event like crisis? To answer this question, you might read Gavyn Davies opinion on FT: Why can’t economists predict disruptive events? or David Orrell's Why we missed the storm.

Coronavirus and Indonesia's Economic Growth

Adrian Wail Akhlas and Esther Samboh, The Jakarta Post (Feb 20):
“A drop of 1 percentage point in China’s economic growth will result in a drop of 0.3 to 0.6 percentage points in Indonesia’s [growth],” Finance Minister Sri Mulyani said during a press briefing in Jakarta on Wednesday.

Indonesia’s economic growth rate, which hit a three-year of 4.97 percent in the fourth quarter of 2019, was projected to grow 5.3 percent this year. Sri Mulyani’s estimate meant economic growth may slide to 4.7 percent.
Last week, Bank Indonesia Economic and Monetary Policy Department director IGP Wira Kusuma said that the bank is optimistic this year's economy can grow by up to 5.4 percent amid coronavirus outbreak.

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