| Private Capital flow represents one of the source of development financing in Indonesia. In relation with this, capital flow has important meaning. Theoretical and empirical evidence show that capital flow are influenced by many variables, classified as fiscal variable and monetary variable. The purpose of this research is to analyse the impact of fiscal and monetary variables on capital flow in Indonesia Period 1992.III up to 2002.IV. The result of this research shows that inflation and exchange rate depreciation affect capital flow the most. This fact confirms that capital flow characteristic is influenced by investor speculation motive. On the other hand, backward expected inflation has the most Impact to the inflation. This condition shows that societal behaviour tends to adapt the previous inflation. Whereas fiscal variable like budget deficit and overseas debt, although significant but this impact is relatively small. |