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Triple Shock on External Sustainability in Indonesia

Author

Listed:
  • Aloysius Deno Hervino

    (Atma Jaya Catholic University of Indonesia, Indonesia)

  • Insukindro

    (Universitas Gadjah Mada, Indonesia)

  • Sekar Utami Setiastuti

    (Universitas Gadjah Mada, Indonesia)

  • Amirullah Setya Hardi

    (Universitas Gadjah Mada, Indonesia)

Abstract

This study evaluates Indonesia’s external sustainability by analyzing exports, imports, and net unilateral transfer payments. The study utilizes Indonesia’s data from the third quarter of 2005 to the fourth quarter of 2019, applying both a long-run dynamic model and a short-run forward-looking model incorporating triple shocks. This research excludes the period from 2020 onwards due to the economic upheaval in Indonesia resulting from the COVID-19 outbreak. This study concludes that Indonesia’s current account is unsustainable, as neither export nor import variables exhibit a long-term link, hence failing to meet intertemporal budget constraints. Furthermore, imports substantially influence long-term exports, which increase at a slower rate than imports.Economic variations and global oil price volatility also affect exports.

Suggested Citation

  • Aloysius Deno Hervino & Insukindro & Sekar Utami Setiastuti & Amirullah Setya Hardi, 2025. "Triple Shock on External Sustainability in Indonesia," Bulletin of Monetary Economics and Banking, Bank Indonesia, vol. 28(2), pages 217-228, July.
    • Handle: RePEc:idn:journl:v:28:y:2025:i:2c:p:217-228
    DOI: https://doi.org/10.59091/2460-9196.2512
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    References listed on IDEAS

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    JEL classification:

    • E31 - Macroeconomics and Monetary Economics - - Prices, Business Fluctuations, and Cycles - - - Price Level; Inflation; Deflation
    • E37 - Macroeconomics and Monetary Economics - - Prices, Business Fluctuations, and Cycles - - - Forecasting and Simulation: Models and Applications

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