​#    ​​​Title ​  Authors
​​ ​​​November, 2019 ​
​ 10-2019 Crowding Out and Waqf Crowdfunding: Do They Create Macroeconomic Imbalances  Abdul Ghafar Ismail, Wahyu Ario Pratomo 



The “crowding- out” effect of government expenditures gains wide-spread attention at two levels. First, at the policy level, public officials have expressed concern, that massive current and projected government deficits will have a deleterious effect on macroeconomic imbalances. Second, at the academic level, “crowding out” is at least one of the issues which helps to distinguish between followers of the two major macroeconomic schools of thought Keynesians and monetarists? Recently, economist has proposed a waqf-based crowdfunding that can be used to finance the government expenditure. However, the discussion on this subject is very limited. This paper will look at both subjects from more of an academic than a practical policy point of view. Policy implications can be drawn from this discussion, first, the controversy at the academic level are traceable from empirical results in many countries. Second, a descriptive analysis of waqf based crowdfunding will be explained in the context of the deficit financing framework. Does it affect the macroeconomic imbalance?

Keywords: crowding out, government expenditure, waqf, fiscal policy, macroeconomic imbalance JEL Classification: D64, E62, H30, H63, P40