THE EFFECTS OF FLUCTUATION REAL EXCHANGE RATES ON THE BILATERAL TRADE BALANCE BETWEEN INDONESIA –CHINA: OBSERVATION CONDITION OF MARSHALL - LERNER AND THE J-CURVE PHENOMENON APPROACH
No Thumbnail Available
Date
2016-09
Authors
Journal Title
Journal ISSN
Volume Title
Publisher
8th Widyatama International Seminar on Sustainability (WISS 2016), Widyatama University, 5 - 8
Abstract
This study aims to come to a conclusion as to whether there were effects of the real exchange rates on the bilateral trade balance especially in export-import sector and to prove that the Marshall-Lerner condition (for medium to long term time frame) was met, as well as whether the J- Curve phenomenon in the short term also took place during the 23-year trade period of Indonsia and China (1990 to 2013). The results derived from using the Error Correction Method within the period to exhibit a research gap: the exchange rate fluctuations did not affect the balancewhich in turn pointed to the conclusion of the absence of performance increase in the sectors. Several factors such as politics, social, and cultural issues contributed to the economic factors which sustained the condition
Description
Keywords
Real Exchange Rates, Trade Balance, Error Correction Method (ECM), Marshall-Lerner Condition, J- Curve