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PENGARUH NILAI TUKAR RIIL TERHADAP NERACA PERDAGANGAN BILATERAL INDONESIA: Kondisi Marshall-Lerner dan Fenomena J-curve

Author

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  • Jardine Ariena Husman

    (Bank Indonesia)

Abstract

The paper analyzes the Marshall-Lerner condition on Indonesian trade with its major trading partners. This study also investigates the existence of J-curve and covers the issue of the indirect pass-through effect, particularly the impact of the real exchange rate change on the Indonesian export performance. We apply the VECM model on the quarterly data of Indonesia and 8 of its trading partners, during the period of 1993:1-2004:4. The estimation result on the overall sample shows that the condition of Marshall-Lerner is satisfied, implying the rupiahs depreciation will increase the Indonesian export. Using each trading partner pair data, the Marshall-Lerner condition is not satisfied on the case of Singapore and England due to the inelastic export demand as the Indonesian export to both countries is mostly a consumption goods. The J-curve phenomenon is only found in the case of Japan, South Korea and Germany implying the depreciation of Rupiahs will increase Indonesian export. The elasticity estimation shows that 1% depreciation of Rupiahs only raise Indonesian export-import ratio by 0.37%. This small number strongly indicates that real exchange rate only plays a minor role on the Indonesian export performance.

Suggested Citation

  • Jardine Ariena Husman, 2005. "PENGARUH NILAI TUKAR RIIL TERHADAP NERACA PERDAGANGAN BILATERAL INDONESIA: Kondisi Marshall-Lerner dan Fenomena J-curve," Bulletin of Monetary Economics and Banking, Bank Indonesia, vol. 8(3), pages 1-26, December.
    • Handle: RePEc:idn:journl:v:8:y:2005:i:3:p:1-26
    DOI: https://doi.org/10.21098/bemp.v8i3.141
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    Citations

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    Cited by:

    1. Kim Edwards & Sahminan, 2008. "Exchange Rate Movements in Indonesia: Determinants, Effects, and Policy Challenges," Working Papers WP/25/2008, Bank Indonesia.
    2. Akhis HUTABARAT, 2010. "Monetary Transmission of Elongated Shock to the Risk Premium," EcoMod2010 259600078, EcoMod.

    More about this item

    Keywords

    Exchange rate; J-Curve; Marshall-Lerner; export; VECM;
    All these keywords.

    JEL classification:

    • C22 - Mathematical and Quantitative Methods - - Single Equation Models; Single Variables - - - Time-Series Models; Dynamic Quantile Regressions; Dynamic Treatment Effect Models; Diffusion Processes
    • F14 - International Economics - - Trade - - - Empirical Studies of Trade

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