Abstract
The purpose of this study is to examine the determinants of the exchange rate in Indonesia by using a hybrid model which is a combination of macroeconomic model with a model of the microstructure. Furthermore, hybrid models are estimated using an error correction model of Domowitz El-Badawi. The results show that five macro variables (money supply, interest rates, inflation, output growth, and capital flow) and a variable microstructures (inventory) has a significant influence on the determination of the exchange rate.
| Original language | English |
|---|---|
| Pages (from-to) | 1026-1033 |
| Number of pages | 8 |
| Journal | Journal of Applied Economic Sciences |
| Volume | 11 |
| Issue number | 6 |
| Publication status | Published - 1 Sept 2016 |
Keywords
- Error correction model
- Exchange rate
- Hybrid model
- Macroeconomic model
- Microstructure model
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