Analysis of Equilibrium Phenomena Short Term and Long Term Fluctuations Current Account Balance in Indonesia

Satrianto, Alpon and Anis, Ali (2016) Analysis of Equilibrium Phenomena Short Term and Long Term Fluctuations Current Account Balance in Indonesia. In: Proceeding International Conference Local wisdom for Re-Thinking Global Solutions, 21-23 September 2016, Padang.

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Abstract

This study aims to describe the influence of the Indonesian economy, the Japanese economy, the US economy, the Chinese economy and the exchange rate against the ratio of the current account to GDP in Indonesia, both in the short term and in the long term. in this study in the form of time series data from the first quarter of 2000 - the fourth quarter of 2014. The analysis model used is Ordinary Least Square (OLS), an error correction mechanism (ECM) and Co-integration. The study concluded that the results of the OLS estimates showed a significant difference between the Indonesian economy, the US economy, Japan's economy, China's economy and the exchange rate against fluctuations in the current account in Indonesia. While based on the estimation of the ECM showed there is an imbalance in the short term or short-term relationship between changes in the economy United States, Japan and China as well as changes in the exchange rate fluctuations to changes in the current account. While the change in the Indonesian economy in the short term does not cause fluctuations in the current account. Additionally, based on the estimation of cointegration although short-term fluctuations of an imbalance in the current account, but in the long-term fluctuations in the current account will lead to equilibrium. Based on the above conclusions, the suggestions that can be raised is the need to foster harmonious working relationship Indonesia with trading partner countries, the need for trade policy strategy, especially in diversifying their main trading partner for exports

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