Exchange Rate Volatility and Economic Growth: Managed Floating and Free-Floating Regime
Indonesia's economy has been in its worst period. At that time, economic growth was below zero percent. One of the reasons is the high volatility of exchange rates in 1997-1998 when the exchange rate regime was transferred from managed floating to free-floating. Now, the high volatility of the...
| Main Authors: | , |
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| Format: | Article |
| Language: | English |
| Published: |
Universitas Merdeka Malang
2022-02-01
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| Series: | Jurnal Keuangan dan Perbankan |
| Subjects: | |
| Online Access: | https://jurnal.unmer.ac.id/index.php/jkdp/article/view/5878 |
| _version_ | 1819046336557744128 |
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| author | Felicia Grace Ratnasari Utomo Siti Saadah |
| author_facet | Felicia Grace Ratnasari Utomo Siti Saadah |
| author_sort | Felicia Grace Ratnasari Utomo |
| collection | DOAJ |
| description | Indonesia's economy has been in its worst period. At that time, economic growth was below zero percent. One of the reasons is the high volatility of exchange rates in 1997-1998 when the exchange rate regime was transferred from managed floating to free-floating. Now, the high volatility of the exchange rate is feared to have an impact on the economy, especially economic growth, because it is one of the main focuses of the government's current achievements. Therefore, this study aims to see whether volatility impacts Indonesia's economic growth, especially in two different exchange rate regimes, managed floating and free-floating. This empirical research is based on quarterly data for 1994 - 2020, using the estimation method of Generalized Autoregressive Conditional Heteroskedasticity (GARCH) and Vector Autoregressive Model (VAR). The result shows that exchange rate volatility has a significant negative effect on economic growth, while the exchange rate regime moderates the impact of exchange rate volatility on economic growth. |
| first_indexed | 2024-12-21T10:42:51Z |
| format | Article |
| id | doaj.art-a2a4b8a8255544db8d523f27aff5a8b5 |
| institution | Directory Open Access Journal |
| issn | 1410-8089 2443-2687 |
| language | English |
| last_indexed | 2024-12-21T10:42:51Z |
| publishDate | 2022-02-01 |
| publisher | Universitas Merdeka Malang |
| record_format | Article |
| series | Jurnal Keuangan dan Perbankan |
| spelling | doaj.art-a2a4b8a8255544db8d523f27aff5a8b52022-12-21T19:06:53ZengUniversitas Merdeka MalangJurnal Keuangan dan Perbankan1410-80892443-26872022-02-0126117318310.26905/jkdp.v26i1.58783072Exchange Rate Volatility and Economic Growth: Managed Floating and Free-Floating RegimeFelicia Grace Ratnasari Utomo0Siti Saadah1Purnomo Yusgiantoro CenterUniversitas Katolik Indonesia Atma JayaIndonesia's economy has been in its worst period. At that time, economic growth was below zero percent. One of the reasons is the high volatility of exchange rates in 1997-1998 when the exchange rate regime was transferred from managed floating to free-floating. Now, the high volatility of the exchange rate is feared to have an impact on the economy, especially economic growth, because it is one of the main focuses of the government's current achievements. Therefore, this study aims to see whether volatility impacts Indonesia's economic growth, especially in two different exchange rate regimes, managed floating and free-floating. This empirical research is based on quarterly data for 1994 - 2020, using the estimation method of Generalized Autoregressive Conditional Heteroskedasticity (GARCH) and Vector Autoregressive Model (VAR). The result shows that exchange rate volatility has a significant negative effect on economic growth, while the exchange rate regime moderates the impact of exchange rate volatility on economic growth.https://jurnal.unmer.ac.id/index.php/jkdp/article/view/5878exchange rate volatilityeconomic growthexchange rate regimegeneralized autoregressive conditional heteroskedasticity (garch)vector autoregressive model (var) |
| spellingShingle | Felicia Grace Ratnasari Utomo Siti Saadah Exchange Rate Volatility and Economic Growth: Managed Floating and Free-Floating Regime Jurnal Keuangan dan Perbankan exchange rate volatility economic growth exchange rate regime generalized autoregressive conditional heteroskedasticity (garch) vector autoregressive model (var) |
| title | Exchange Rate Volatility and Economic Growth: Managed Floating and Free-Floating Regime |
| title_full | Exchange Rate Volatility and Economic Growth: Managed Floating and Free-Floating Regime |
| title_fullStr | Exchange Rate Volatility and Economic Growth: Managed Floating and Free-Floating Regime |
| title_full_unstemmed | Exchange Rate Volatility and Economic Growth: Managed Floating and Free-Floating Regime |
| title_short | Exchange Rate Volatility and Economic Growth: Managed Floating and Free-Floating Regime |
| title_sort | exchange rate volatility and economic growth managed floating and free floating regime |
| topic | exchange rate volatility economic growth exchange rate regime generalized autoregressive conditional heteroskedasticity (garch) vector autoregressive model (var) |
| url | https://jurnal.unmer.ac.id/index.php/jkdp/article/view/5878 |
| work_keys_str_mv | AT feliciagraceratnasariutomo exchangeratevolatilityandeconomicgrowthmanagedfloatingandfreefloatingregime AT sitisaadah exchangeratevolatilityandeconomicgrowthmanagedfloatingandfreefloatingregime |