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ABSTRACT
The lack of natural gas infrastructure is the main hurdle in maximizing natural gas usage in Indonesia. This study analyzes the substitution of natural gas for petroleum fuels and its investment impacts on Indonesian economic performances using econometrics. Five econometric models have been proposed which are capable of describing economic behavior. The policy simulations show that fuel substitution has a significant impact on Indonesian economic performance, particularly related to reducing unemployment.
Acknowledgments
Statistical Analysis System/Econometric Time Series software provided by Dr. Rasidin Sitepu Institut Pertanian Bogor is gratefully acknowledged.