Exchange Rate of Indonesia: Does Rupiah Overshoot?

Wahyu Pratomo ()

MPRA Paper from University Library of Munich, Germany

Abstract: This research attempts to analyze whether Rupiah overshoots when the crisis hit Indonesia in mid of 1998. It also try to find out the fundamental macroeconomic factors that influence exchange rate when economic crisis hit Indonesia. It uses ordinary least square method and also cointegration in order to see long-term relationship. Furthermore, in order to examine the stability of exchange rate when the exchange rate system changed from managed floating to free floating, this paper apply Chow Test. The result shows that when the economic crisis hit Indonesia, Rupiah overshoots and there has been a structural change of exchange rate after 1998.

Keywords: Overshoot; exchange rate; economic crisis; Indonesia (search for similar items in EconPapers)
JEL-codes: E4 E51 F31 (search for similar items in EconPapers)
Date: 2005-09
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (1)

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