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Validity test of purchasing power parity doctrine: An Indonesian case study

Economic Journal of Emerging Markets

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Field Value
 
Title Validity test of purchasing power parity doctrine: An Indonesian case study
 
Creator Sidiq, Sahabudin; Department of Economics, Universitas Islam Indonesia, Yogyakarta, Indonesia
Herawati, Herawati; Crawford School of Public Policy, Australian National University, Canberra
 
Subject —
purchasing power parity, ex-change rate, undervalued
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Description 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.
 
Publisher Universitas Islam Indonesia
 
Contributor —
 
Date 2016-10-01
 
Type info:eu-repo/semantics/article
info:eu-repo/semantics/publishedVersion
Peer-reviewed Article
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Format application/pdf
 
Identifier http://journal.uii.ac.id/index.php/JEP/article/view/6393
10.20885/ejem.vol8.iss2.art4
 
Source Economic Journal of Emerging Markets; Volume 8 Issue 2, 2016; 120-127
2502-180X
2086-3128
 
Language eng
 
Relation http://journal.uii.ac.id/index.php/JEP/article/view/6393/5764
 
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Rights Copyright (c) 2016 Economic Journal of Emerging Markets
http://creativecommons.org/licenses/by-sa/4.0