How responsive are Indonesia's bilateral inpayments and outpayments to real depreciation of Rupiah?
Purpose – The purpose of this paper is to investigate the sensitivity of Indonesia's inpayments and outpayments to currency depreciation on a bilateral basis. Design/methodology/approach – The methodology used is based on the bounds testing approach. Findings – It is found that while real depreciation of Rupiah has short-run effects in a majority of the cases, these effects last into the long-term in almost 50 percent of the cases. Surprisingly, almost all of the affected partners in the long run are found to be the Asian countries. Originality/value – The paper is very original in that no one has looked at this issue before. JEL classification: F31
Volume (Year): 29 (2012)
Issue (Month): 2 (June)
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