The Determinants of Trade Balance and Adjustment to the Crisis in Indonesia

Iman Sugema

No 2005-08, Centre for International Economic Studies Working Papers from University of Adelaide, Centre for International Economic Studies

Abstract: This paper investigates the effects of real exchange rate depreciation and supply side shocks on exports and imports. Indonesia provides an interesting case study of the subject because this country experienced a large depreciation, banking sector collapse, and socio-political turbulence during the Asian crisis episode. The results suggest that trade balance will improve following devaluation through an increase in exports and a collapse in imports. Because the elasticity of imports with respect to the real exchange rate is greater than that of exports, improvement in trade balance would be mainly come from import compression. It is also found that export performance could have been far better if Indonesia did not suffer from banking problems and socio-political turbulence.

Keywords: Real Exchange Rate; Export; Import; Indonesia. (search for similar items in EconPapers)
JEL-codes: F10 F31 (search for similar items in EconPapers)
Pages: 30 pages
Date: 2005-06
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (10)

Downloads: (external link)
http://www.adelaide.edu.au/cies/papers/0508.pdf (application/pdf)
Our link check indicates that this URL is bad, the error code is: 404 Not Found (http://www.adelaide.edu.au/cies/papers/0508.pdf [301 https://www.adelaide.edu.au/cies/papers/0508.pdf]--> https://www.adelaide.edu.au/cies/papers/0508.pdf)

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:adl:cieswp:2005-08

Access Statistics for this paper

More papers in Centre for International Economic Studies Working Papers from University of Adelaide, Centre for International Economic Studies Contact information at EDIRC.
Bibliographic data for series maintained by Dmitriy Kvasov ( this e-mail address is bad, please contact ).