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Title: |
Using Indonesia's Real Exchange Rate to Test Ricardian Equivalence |
| Author: |
Abimanyu, Yoopi |
| Author
Affiliation: |
Ministry of
Finance of Indonesia |
| Source: |
International Economic Journal, Autumn 1998, v. 12, no. 3, pp. 17-29 |
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Publication Date: |
Autumn 1998 |
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Abstract: |
Using Indonesia as a study case, this
paper analyzes the relationship between the actual real exchange rate,
the equilibrium real exchange rate, and other macroeconomic variables.
The estimate shows that, out of nine explanatory independent variables,
only government consumption and the fiscal deficit have significant
effects on the real exchange rate variable. Increases in both government
consumption and the fiscal deficit appreciate the real exchange rate.
This finding rejects Ricardian equivalence. |
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