<abstract xmlns="http://www.w3.org/1999/xhtml"><p>This study investigates the determinants of Indonesian’s business cycle using the global vector autoregressive (GVAR) approach, by including spillover responses within 33 countries with 2000 bootstrap replications. The results show that Indonesia’s business cycle is influenced by both domestic and external factors. In addition to exogenous shocks from output, the dominant domestic factors are monetary policy and price competitiveness. The dominant external factors are global economic activity and liquidity conditions, particularly those originating from the Chinese economy. Spillovers from a number of economies appear to shape Indonesia’s economic fluctuations. The paper discusses such relevant spillovers.</p></abstract>

This study investigates the determinants of Indonesian’s business cycle using the global vector autoregressive (GVAR) approach, by including spillover responses within 33 countries with 2000 bootstrap replications. The results show that Indonesia’s business cycle is influenced by both domestic and external factors. In addition to exogenous shocks from output, the dominant domestic factors are monetary policy and price competitiveness. The dominant external factors are global economic activity and liquidity conditions, particularly those originating from the Chinese economy. Spillovers from a number of economies appear to shape Indonesia’s economic fluctuations. The paper discusses such relevant spillovers.

The Determinants of Indonesia’s Business Cycle

Department of Economic and Monetary Policy at Bank Indonesia

Journal of Central Banking Theory and Practice

This work is licensed under the Creative Commons Attribution 4.0 Public License.

{"article-title":"The Determinants of Indonesia\u2019s Business Cycle"}

This study investigates the determinants of Indonesian’s business cycle using the global vector autoregressive (GVAR) approach, by including spillover...

The Determinants of Indonesia’s Business Cycle

Published Online: Jul 16, 2020

Page range: 215 - 235

DOI: https://doi.org/10.2478/jcbtp-2020-0029

Keywords
Business cycle, Trade relations, Global vector autogressive approach

© 2020 Berry A. Harahap et al., published by Sciendo

This work is licensed under the Creative Commons Attribution 4.0 Public License.

The Determinants of Indonesia’s Business Cycle

Published Online: Jul 16, 2020

Page range: 215 - 235

DOI: https://doi.org/10.2478/jcbtp-2020-0029

KeywordsBusiness cycle, Trade relations, Global vector autogressive approach

© 2020 Berry A. Harahap et al., published by Sciendo

This work is licensed under the Creative Commons Attribution 4.0 Public License.

Keywords
Business cycle, Trade relations, Global vector autogressive approach