Nilai Tukar dan Trade Flows

Siti Astiyah and M. Setyawan Santoso
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Siti Astiyah: Bank Indonesia
M. Setyawan Santoso: Bank Indonesia

Bulletin of Monetary Economics and Banking, 2005, vol. 8, issue 3, 1-32

Abstract: The paper is testing the Marshal-Lerner condition and the J-Curve phenomenon on the Indonesian trade. We apply the panel regression model and anlyze the impact of the real depreciation of Rupiah on the trade performance, both in the short run and in the long run. The study indicates the insignificant of the Rupiah real depreciation to boost the export performance in the short run. When the time horizon is long enough, the increase of the export caused by the depreciation, will offset the increase of the import, hence in the long run the real depreciation of Rupiah may significantly increase the trade performance, but still in a small number. The implication is clear for the policy maker; if the aim of the policy is to boost the trade performance, then the exchange rate policy should not be an alternative, rather using policy to increase the productivity, efficiency, product quality management, loose tax policy and the creation of the business climate. This includes the industrial re-structuring to lower the import dependences.

Keywords: J-Curve; Marshal-Lerner; trade; exchange rate; panel regression (search for similar items in EconPapers)
JEL-codes: C23 F14 (search for similar items in EconPapers)
Date: 2005
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Citations: View citations in EconPapers (1)

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Persistent link: https://EconPapers.repec.org/RePEc:idn:journl:v:8:y:2005:i:3:p:1-32

DOI: 10.21098/bemp.v8i3.140

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