Verico, Kiki (2017): Indonesia towards 2030 and beyond: A Long-Run International Trade Foresight.
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Abstract
One of the most important variables in the emerging economies like Indonesia is the stability of the exchange rate. Unstable exchange rates make it almost impossible for all business ventures to plan the business. The higher the depreciation of the Rupiah the higher the inflation rate and this will decrease people's purchasing power. In the balance of payments, the stability of the exchange rate and capital account are strongly influenced by the current account balance. A study found that in Indonesia, in the long run (Johansen Procedure) Indonesia current account balance affects the real exchange rate while in the short run (VECM) it affects the nominal exchange rate. The study also found that in the current account balance the one that affecting the exchange rate is the trade balance. Indonesia's trade balance relies on a surplus of trade in goods, especially agricultural products, petroleum and gas. The price of products in the primary sector is very vulnerable because of the volatility of primary products due to that of world’s oil and gas price. Indonesia's current account balance is highly dependent on manufacturing product trade. Another study found that in real-world, manufacturing trade influences more the capital flows than vice versa. Therefore, in order to maintain a positive long-term economic growth and stable exchange rate, Indonesia must increase its trade competitiveness, especially in the manufacturing sector. This paper will explore the challenges and opportunities of international trade in Indonesia towards 2030 and afterwards.
Item Type: | MPRA Paper |
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Original Title: | Indonesia towards 2030 and beyond: A Long-Run International Trade Foresight |
English Title: | Indonesia towards 2030 and beyond: A Long-Run International Trade Foresight |
Language: | English |
Keywords: | Long-run foresight; international trade; 2030 and beyond; Indonesia; Indonesia economy |
Subjects: | F - International Economics > F0 - General F - International Economics > F1 - Trade > F14 - Empirical Studies of Trade F - International Economics > F1 - Trade > F17 - Trade Forecasting and Simulation F - International Economics > F5 - International Relations, National Security, and International Political Economy > F53 - International Agreements and Observance ; International Organizations F - International Economics > F6 - Economic Impacts of Globalization > F63 - Economic Development L - Industrial Organization > L6 - Industry Studies: Manufacturing > L66 - Food ; Beverages ; Cosmetics ; Tobacco ; Wine and Spirits O - Economic Development, Innovation, Technological Change, and Growth > O1 - Economic Development > O14 - Industrialization ; Manufacturing and Service Industries ; Choice of Technology O - Economic Development, Innovation, Technological Change, and Growth > O1 - Economic Development > O17 - Formal and Informal Sectors ; Shadow Economy ; Institutional Arrangements O - Economic Development, Innovation, Technological Change, and Growth > O2 - Development Planning and Policy > O24 - Trade Policy ; Factor Movement Policy ; Foreign Exchange Policy |
Item ID: | 79645 |
Depositing User: | Kiki Verico |
Date Deposited: | 10 Jun 2017 06:43 |
Last Modified: | 26 Sep 2019 11:12 |
References: | Amaglobeli, D., and Shi, W. (2016), How to Assess Fiscal Implications of Demographic Shifts: A Granular Approach, IMF Intenational Monetay Fund (2017), Gaining Momentum?, World Economic Outlook - IMF Kurniawati, H. dan Verico, K. (2017), Hubungan Ekonomi Fundamental antara Nilai Tukar Riil dan Neraca Transaksi Berjalan: Studi Kasus ASEAN4 Periode 1990 -2015, Unpublished Undergraduate Thesis Prabowosunu, A., and Verico, K. (2017), Indonesia’s Short-Term Capital Inflows in 2005-2015 Period: A Blessing or A Curse, Unpublished Undergraduate Thesis Revindo, M. D. (2017). Internationalisation of Indonesian SMEs. Lincoln University, Christchurch, New Zealand, Unpublished Doctoral Thesis Todaro, M.P., and Smith, S.C. (2010), Economic Development, 11th Edition, Addison – Wesley UNDP (2017), Human Development Reports, UNDP Verico, K., (2017). The Future of ASEAN Economic Integration. Palgrave Macmillan: London, pp. 1-269 (Monograph) Verico, K., (2017). Are the Benefits from ASEAN Integration Sustainable? Asian Economic Papers, MIT Press Journals, Under Review World Bank (2017), Publication and WDI Dataset - WB World Economi Forum (2017), Global Competitiveness Report – WEF |
URI: | https://mpra.ub.uni-muenchen.de/id/eprint/79645 |
Available Versions of this Item
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Indonesia towards 2030 and beyond: A Long-Run International Trade Foresight. (deposited 07 Jun 2017 05:32)
- Indonesia towards 2030 and beyond: A Long-Run International Trade Foresight. (deposited 10 Jun 2017 06:43) [Currently Displayed]