Exchange rate volatility and export volume : the case of Indonesia and its main trading partners

This paper examines the impact of exchange rate volatility on Indonesia’s export to-United States, Japan and China using both aggregate and disaggregate data. We first estimated each pair country with export demand equations based on data from 1996 to 2014. A set of export demand equations is estimated by using Seemingly Unrelated Regression to characterized the correlation of the disturbances across equations. In general, the estimation result shows that exchange rate volatility has negative impact on export. Estimations based on disaggregate data indicate that the impact of the exchange rate volatility on exports remains negative however it varies among industries in the countries under investigation.peer-reviewe

ASEAN-China free trade area : an assessment of tariff elimination effect on welfare

This study aimed to assess the economic impact of the the establishment of the ACFTA policy by simulating trade barrier removal. In performing this analysis, we evaluated the effects of trade of member of commodities in EHP, NT, and HSL categories separately. We apply the data using a general equilibrium model (GTAP). Results showed that the elimination of tariff and non-tariff trade barriers to product groups within NT and HSL categories had a positive impact on trade volume, economic growth, and welfare. In general, the ACTFA is likely to have a beneficial impact on welfare in participating countries. Singapore and China had the highest welfare increase relative to other members of ASEAN.peer-reviewe

Pengaruh Penggabungan Mata Uang Di Uni Eropa Terhadap International Risk Sharing Dan Home Bias

International Risk Sharing (IRS) adalah pembagian risiko secara Internasional antar-negara dalam suatukawasan atau dalam kawasan berbeda yang disebabkan oleh adanya gejolak spesik terhadap suatuperekonomian yang menyebabkan pendapatan (konsumsinya) beruktuasi. Tujuan studi ini adalah untukmenganalisis pengaruh dari terjadinya penggabungan mata uang di negara-negara Uni Eropa terhadapperkembangan IRS dan home bias di negara-negara tersebut. Dengan melihat hubungan output danpendapatan suatu negara dengan output dan pendapatan rata-rata kawasan, menggunakan data sebelasnegara awal yang tergabung dalam mata uang tunggal Euro, studi ini menemukan bahwa penggabunganmata uang di wilayah negara-negara Uni Eropa meningkatkan risk sharing dan home bias secara signikan

Perilaku Tabungan ASEAN 5, Jepang, Cina, Korea, Dan Implikasinya Terhadap Ketidakseimbangan Global

The study examines saving behavior in ASEAN 5+3 namely Indonesia, Malaysia, Singapore, Thailand, Philippines, Japan, Cina, and Korea during 1991-2007 and its implication toward global imbalances. By using fixed effect panel data regression, this research shows that government spending, interest rate and inflation, financial development through private domestic credit and stock market capitalization along with the 1997 Asian crisis significantly affect the saving behavior. As a result, a macroeconomic stability through interest rate and inflation, the reinforcement of financial development and crisis anticipation policy are required to support global rebalancing through global saving redistribution

Optimal monetary and macroprudential policies under risk taking environment

The purpose of this study is to identify the existence of risk taking behavior in economic agents and optimal monetary and macro prudential policy options in Indonesia. Using the household and firm balance sheet data during the period 2002q1-2013q4, our approach found that risk taking behavior occurs both in households and firms in Indonesia. We develop a model whose economic agents consist of households, firms, banks and central banks by treating the bank credit risk as an endogenous variable. The performance of the model suggests that the monetary shock response drives an increase in credit growth. The same pattern occurs in the shock of increasing asset prices and increasing world GDP. Furthermore, this study model contributes to a deeper understanding of the prudential policy framework. In the even of risk taking, either shock by exogenous asset price or world economy shock, monetary policy alone nor macroprudential alone may not be optimal policy responses.peer-reviewe

Banks’ risk taking behavior and the optimization monetary policy

This study analyzes the behavior of risk taking on economic agents such as banks, households, and firms as a repond of monetary policy and macroprudential choices in Indonesia. The behavior of economic agents modeled in a DSGE models. In the model, the credit risk is modeled endogenously. Credit risk is a function of household and firm leverage ratio, bank leverage ratio, property market and general economy condition. Moreover, there are two types of bank in assessing the risks of credit. The results show that, endogenous credit risk, has an impact on the deepen procyclicality in credit. Furthermore, this research model contributes to a deeper understanding of the prudential policy framework. In the event of risk taking, analysis optimal policy responses using the loss function of central banks. The policy of lower interest rates should be combined with a loan to value ratio policy and increase CAR to generate the smallest lossespeer-reviewe

Analisis Keseimbangan Eksternal Indonesia: Pendekatan Intertemporal Model of Current Account

Current account balance has an important role of measuring the direction and the amount of International loan. This study analyzes Indonesian external balance due to its solvency condition of external debt and sustainability of current account balance during 1970{2007 by intertemporal-model approach of current account. The results of cointegration test and bivariate autoregressive (VAR) indicate that solvency condition holds, but not for the sustainability condition of current account balance. It means that Indonesia has capability to payback its external debt

Developing The Model of Integrated Social Safety Net Programmes Towards Better Financial Well-Being

Social safety net initiative is essentially a set of policies and programmes designed to ensure basic standards of living in a nation are met and protecting people from economic shocks. Despite various social safety net programmes have been delivered by the government to serve these objectives, studies that propose alliance between provision of public assistance, corporate social responsibility programmes and beneficiaries’ self-coping mechanism are very scarce. Therefore, this study aimed to conceptualise a model that integrate the role of public assistance, corporate social responsibility and self-coping mechanism towards better financial well-being of low-income earners in Malaysia. This model attempted to explain the relationship between social safety net programmes delivered by the government and private companies on beneficiaries’ financial well-being. Besides social safety net programmes, financial behaviours of the beneficiaries were also hypothesised as the intervening variable between social safety net programmes and financial well-being. The model produced in the present study deemed to offer a good direction for socio-economic scholars and policy makers in improving Malaysians’ financial well-being through better governance and delivery of social safety net programmes in the future

Labour market reactions to lockdown measures during the Covid-19 pandemic in Malaysia: an empirical note

In this empirical note, we examine the relationship between the loss of employment and lockdown measures undertaken by the Malaysian government during the Covid-19 pandemic outbreak over the period from 25 January 2020 to 10 September 2020. By using cointegration analysis, our results suggest that there are both long-run and short-run relationships between loss of employment and lockdown measures in Malaysia. Lockdown measures show positive impact on the number of workers who lost their jobs during the pandemic. The loss of employment increases by 0.35% to 1.1% for every 1% increase in the lockdown measures