Currency Crisis, Inflation and Stability of Demand for Broad Money: The Case of Indonesia
Abstract: In the aftermath of the Asian financial crisis, there was widespread concern among the Asian economies that this could potentially have resulted in persistent inflation with volatile money demand in the region. By employing multivariate cointegration methodology, this paper examines the implication of currency crisis on inflation and structural stability of demand for broad money in Indonesia. Recursive estimation and diagnostic tests were implemented to check parameter constancy across regime changes over the period 1991-2004 . The results indicate that controlling for structural breaks (except for 1997 and 1998) the demand for real broad money remained stable in the aftermath of the currency crisis in Indonesia. Further, the study finds evidence that changes in broad money, exchange rate depreciation, and interest rates have a significant impact on inflation inertia in Indonesia, both before and after the currency crisis.
Download InfoTo our knowledge, this item is not available for download. To find whether it is available, there are three options:
1. Check below under "Related research" whether another version of this item is available online.
2. Check on the provider's web page whether it is in fact available.
3. Perform a search for a similarly titled item that would be available.
Bibliographic InfoArticle provided by IUP Publications in its journal The IUP Journal of Applied Economics.
Volume (Year): VII (2008)
Issue (Month): 6 (November)
Contact details of provider:
You can help add them by filling out this form.
reading list or among the top items on IDEAS.Access and download statisticsgeneral information about how to correct material in RePEc.
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (G R K Murty).
If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.
If references are entirely missing, you can add them using this form.
If the full references list an item that is present in RePEc, but the system did not link to it, you can help with this form.
If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your profile, as there may be some citations waiting for confirmation.
Please note that corrections may take a couple of weeks to filter through the various RePEc services.