Monetary Policy and Trade Balance in Indonesia: Evidence from a Structural VAR Analysis

Lestano Lestano
2015 Economics and Finance in Indonesia  
This paper investigates the response of the trade balance to monetary policy innovations for the Indonesia economy using a Structural Vector Auto Regressive (SVAR) model. We estimate three type of SVAR models using monthly data, that is, for full sample (1980:M1 until 2005:M3), pre-(1980:M1-1997:M6), and post-Asian crisis periods (1998:M1-2005:M3). The aim of splitting full sample size is to take into account a sensibility of structural break due to the onset of Asian financial crisis in
more » ... 1998]. The dynamic properties of the model are discussed and monetary policy shocks identified by means of various impulse responses and a variance decomposition.
doi:10.7454/efi.v57i2.37 fatcat:tvjybupsynaujhaz5oy3lwgofi