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Impact of exchange rate volatility on Indonesia's trade performance in the 1990s

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  • Siregar, Reza
  • Rajan, Ramkishen S.

Abstract

Whether a real devaluation ultimately proves to be expansionary or contractionary depends on whether the boost given to the exportables sector offsets any possible output-depressing effects that may accompany the expenditure-switching policy. Failure of the exportables sector to adequately respond to the price incentives is a virtual guarantee that devaluation will be contractionary. This appears to have been the experience of Indonesia, the country worst hit by the crisis of 1997-98. This paper explores whether the increased exchange rate variability of the Indonesian rupiah post 1997 may have been a cause for the countryÂ’s poor export performance.

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Bibliographic Info

Article provided by Elsevier in its journal Journal of the Japanese and International Economies.

Volume (Year): 18 (2004)
Issue (Month): 2 (June)
Pages: 218-240

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Handle: RePEc:eee:jjieco:v:18:y:2004:i:2:p:218-240

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Web page: http://www.elsevier.com/locate/inca/622903

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References

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Citations

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Cited by:
  1. Naseem, N.A.M & Tan, Hui-Boon & Hamizah, M.S, 2008. "Exchange Rate Misalignment, Volatility and Import Flows in Malaysia," MPRA Paper 41571, University Library of Munich, Germany.
  2. Weera Prasertnukul & Donghun Kim & Makoto Kakinaka, 2010. "Exchange Rates, Price Levels, and Inflation Targeting: Evidence from Asian Countries," Working Papers, Research Institute, International University of Japan EMS_2010_03, Research Institute, International University of Japan.
  3. Rudy Rahmaddi & Masaru Ichihashi, 2011. "How Do Foreign and Domestic Demand Affect Exports Performance? An Econometric Investigation of Indonesia's Exports," IDEC DP2 Series, Hiroshima University, Graduate School for International Development and Cooperation (IDEC) 1-4, Hiroshima University, Graduate School for International Development and Cooperation (IDEC), revised Jan 2012.
  4. George Hondroyiannis & P.A.V.B. Swamy & George S. Tavlas & Michael Ulan, 2005. "Some Further Evidence on Exchange-Rate Volatility and Exports," Working Papers, Bank of Greece 28, Bank of Greece.
  5. Komain Jiranyakul, 2013. "Exchange Rate Uncertainty and Import Demand of Thailand," Asian Economic and Financial Review, Asian Economic and Social Society, Asian Economic and Social Society, vol. 3(10), pages 1269-1280, October.
  6. Veysel Avsar & Kemal Turkcan, 2013. "Exchange Rate Volatility and U.S. Auto-Industry Exports: A Panel Cointegration Approach," International Journal of Economics and Financial Issues, Econjournals, Econjournals, vol. 3(4), pages 772 - 787.
  7. Arief Bustaman & Kankesu Jayanthakumaran, 2006. "The Impact of Exchange Rate Volatility on Indonesia’s Exports to the USA: An Application of ARDL Bounds Testing Procedure," Working Papers in Economics and Development Studies (WoPEDS), Department of Economics, Padjadjaran University 200610, Department of Economics, Padjadjaran University, revised Dec 2006.
  8. Reza Siregar & Victor Pontines, 2005. "Incidence of Speculative Attacks on Rupiah During the Pre- and Post- 1997 Financial Crisis," School of Economics Working Papers, University of Adelaide, School of Economics 2005-07, University of Adelaide, School of Economics.
  9. Balogun, Emmanuel Dele, 2007. "Exchange rate policy and export performance of WAMZ countries," MPRA Paper 6233, University Library of Munich, Germany.
  10. Thomas Gruber & Doris Ritzberger-Grünwald, 2005. "The Euro Changeover in the New Member States - A Preview," Focus on European Economic Integration, Oesterreichische Nationalbank (Austrian Central Bank), Oesterreichische Nationalbank (Austrian Central Bank), issue 1, pages 52-75.

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