Febriana, Irma and Afif, Fadeli Yusuf (2018) OVERSHOOTING EXCHANGE RATE IN INDONESIA. CONFERENCE PROCEEDINGS THE 14TH IRSA INTERNATIONAL CONFERENCE. pp. 872-882. ISSN 2654-3850
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Abstract
This study aims to test whether there is overshooting phenomenon of Rupiah / USD exchange rate in Indonesia. Exchange rate is one of indicator that must be considered in achieving the stability of a country's economy. A stable exchange rate will push an increasing in investment, consumption, and international trade that will ultimately have an impact on economic growth. This study used the Rupiah / USD exchange rate variable as the dependent variable. In addition, in this study used Money Supply (JUB), Gross Domestic Product (GDP), Interest Rate, and Consumer Price Index (CPI) as independent variables. This study used Error Correction Model (ECM) method to see the short-run effects on exchange rates and the Autoregressive Distributed Lag (ARDL) method to see the effect of exchange rate in the long run. The test results showed that the exchange rate of Rupiah / USD did not experience overshooting. This was indicated by the adjustment of the Rupiah / USD exchange rate was -0.822 smaller than the value in the long-run that was -0.883. The results did not match to the Dornbusch theory where overshooting occurs when short-run exchange rate adjustments are greater than the long-run.
| Item Type: | Article |
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| Subjects: | H Social Sciences > H Social Sciences (General) |
| Divisions: | Fakultas Ekonomi dan Bisnis (FEB) > Prodi Ekonomi Pembangunan |
| Depositing User: | Irma Febriana Mimma Kebahyang |
| Date Deposited: | 10 May 2019 02:32 |
| Last Modified: | 10 May 2019 02:32 |
| URI: | http://repository.lppm.unila.ac.id/id/eprint/12315 |
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