Validity test of purchasing power parity doctrine: An Indonesian case study
The goal of this study is to analyze the doctrine purchasing power parity (PPP) in Indonesia with the case study of the rupiah exchange rate to U.S. dollar. The autoregressive is used to estimate the relationship between the change of exchange rate and the difference Indonesia–USA inflation rate. T...
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| Format: | Article |
| Language: | English |
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Universitas Islam Indonesia
2016-10-01
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| Series: | Economic Journal of Emerging Markets |
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| Online Access: | https://journal.uii.ac.id/JEP/article/view/6393 |
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| author | Sahabudin Sidiq Herawati Herawati |
| author_facet | Sahabudin Sidiq Herawati Herawati |
| author_sort | Sahabudin Sidiq |
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The goal of this study is to analyze the doctrine purchasing power parity (PPP) in Indonesia with the case study of the rupiah exchange rate to U.S. dollar. The autoregressive is used to estimate the relationship between the change of exchange rate and the difference Indonesia–USA inflation rate. The data used in this study are quarterly data obtained from the International Financial Statistics (IFS) and Bank Indonesia (BI) with the period 1997Q4-2013Q4. The exchange rate that used in this study is using the rate on rupiah to U S dollar. The price data used consumer price index in Indonesia and the United States with a base year of 2000. The results of this study show, that rupiah to the U.S. dollar is undervalued during the free floating exchange rate system and, the PPP doctrine to the case of the rupiah to the U.S. dollar is not valid in the period of this study.
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| format | Article |
| id | doaj-art-c9361e90e8f64e94a43b5bdfa8712d89 |
| institution | Matheson Library |
| issn | 2086-3128 2502-180X |
| language | English |
| publishDate | 2016-10-01 |
| publisher | Universitas Islam Indonesia |
| record_format | Article |
| series | Economic Journal of Emerging Markets |
| spelling | doaj-art-c9361e90e8f64e94a43b5bdfa8712d892025-07-27T09:46:48ZengUniversitas Islam IndonesiaEconomic Journal of Emerging Markets2086-31282502-180X2016-10-0182Validity test of purchasing power parity doctrine: An Indonesian case studySahabudin Sidiq0Herawati Herawati1Department of Economics, Universitas Islam Indonesia, Yogyakarta, IndonesiaCrawford School of Public Policy, Australian National University, Canberra The goal of this study is to analyze the doctrine purchasing power parity (PPP) in Indonesia with the case study of the rupiah exchange rate to U.S. dollar. The autoregressive is used to estimate the relationship between the change of exchange rate and the difference Indonesia–USA inflation rate. The data used in this study are quarterly data obtained from the International Financial Statistics (IFS) and Bank Indonesia (BI) with the period 1997Q4-2013Q4. The exchange rate that used in this study is using the rate on rupiah to U S dollar. The price data used consumer price index in Indonesia and the United States with a base year of 2000. The results of this study show, that rupiah to the U.S. dollar is undervalued during the free floating exchange rate system and, the PPP doctrine to the case of the rupiah to the U.S. dollar is not valid in the period of this study. https://journal.uii.ac.id/JEP/article/view/6393purchasing power parityex-change rateundervalued |
| spellingShingle | Sahabudin Sidiq Herawati Herawati Validity test of purchasing power parity doctrine: An Indonesian case study Economic Journal of Emerging Markets purchasing power parity ex-change rate undervalued |
| title | Validity test of purchasing power parity doctrine: An Indonesian case study |
| title_full | Validity test of purchasing power parity doctrine: An Indonesian case study |
| title_fullStr | Validity test of purchasing power parity doctrine: An Indonesian case study |
| title_full_unstemmed | Validity test of purchasing power parity doctrine: An Indonesian case study |
| title_short | Validity test of purchasing power parity doctrine: An Indonesian case study |
| title_sort | validity test of purchasing power parity doctrine an indonesian case study |
| topic | purchasing power parity ex-change rate undervalued |
| url | https://journal.uii.ac.id/JEP/article/view/6393 |
| work_keys_str_mv | AT sahabudinsidiq validitytestofpurchasingpowerparitydoctrineanindonesiancasestudy AT herawatiherawati validitytestofpurchasingpowerparitydoctrineanindonesiancasestudy |