Financial Dollarisation Hysteresis: The Case of Indonesia
Rahmanda Muhammad Thaariq and
Economic Papers, 2019, vol. 38, issue 4, 286-298
This paper provides a determinant analysis of financial dollarisation hysteresis in Indonesia during 2007–2016 by employing the autoregressive distributed‐lag estimation method. Placing emphasis on the return aspect, this paper indicates that financial dollarisation in Indonesia has been shaped by inflation, the exchange rate, inflation volatility, the exchange rate's volatility and the spread. Given the macroeconomic conditions, ensuring credible inflation targeting, making the rupiah more attractive and building a prudent standard would all help Indonesia to escape from its financial dollarisation hysteresis.
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Persistent link: https://EconPapers.repec.org/RePEc:bla:econpa:v:38:y:2019:i:4:p:286-298
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