This paper empirically tests the dynamics of credit cards and monetary policy in the context of Indonesia. Using monthly data from 2006 to 2018 and a structural vector autoregressive model, our findings indicate that credit card usage is mainly driven by Indonesia’s fast economic growth over the last decade, which indeed reflects the role of credit cards in consumption smoothing. The study al…
This paper empirically examines the impact of the price of crude oil petrol and palm oil on Indonesia’s output. Using quarterly data from 2000Q1 to 2019Q2 and both linear and non-linear autoregressive distributed lag approaches to cointegration, we find: 1) a significant non-linear effect of oil prices on the country’s output; 2) a decline in prices of oil can have a greater impact on the c…
This study investigates whether Indonesia?s Current Account (CA) balance is intertemporally solvent. We provide fresh evidence on Indonesia?s CA deficit solvency by considering post-crisis period data and conducting sub-sample analysis. Our findings suggest that Indonesia?s CA is not solvent. We notice evidence of excess lending prior to the global financial crisis of 2008 and excess borrowing …
This paper examines the effectiveness of monetary policy transmission in emerging economies during the COVID-19 pandemic. Using data from 14 emerging economies severely affected by the pandemic and the autoregressive distributed lag approach to cointegration, the study examines the effectiveness of monetary policy in affectin output, inflation, and credit. The study finds that: (1) in most econ…
This paper empirically examines the impact of the price of crude oil petrol and palm oil on Indonesia?s output. Using quarterly data from 2000Q1 to 2019Q2 and both linear and non-linear autoregressive distributed lag approaches to cointegration, we find: 1) a significant non-linear effect of oil prices on the country?s output; 2) a decline in prices of oil can have a greater impact on the count…
This paper suggests a new agenda for constructing early warning models (EWMs) to enhance their effectiveness in predicting financial crises. The central argument of the new agenda aims to eradicate the weaknesses of existing EWMs, since their failure to predict the global financial crisis of 2007?2008 demonstrates the need to improve their efficiency. We document the history of EWMs and propose…
This paper analyzes the determinants of India?s Intra-Industry Trade (IIT) with its trading partner, Indonesia, from 1995 to 2017. We estimate India?s IIT with Indonesia using bilateral commodity trade data at the two-digit Broad Economic Categories classification code level. Our estimates of IIT demonstrate that India?s trade with Indonesia is indeed intra-industry in nature. However, no remar…
This paper empirically tests the dynamics of credit cards and monetary policy in the context of Indonesia. Using monthly data from 2006 to 2018 and a structural vector autoregressive model, our findings indicate that credit card usage is mainly driven by Indonesia?s fast economic growth over the last decade, which indeed reflects the role of credit cards in consumption smoothing. The study also…