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The J-curve: Indonesia vs. Her Major Trading Partners

The J-curve: Indonesia vs. Her Major Trading Partners

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Couple previous studies that have investigated the J-curve phenomenon for Indonesia, have employed aggregate trade data and provided mixed results. Given the aggregation bias embodied in using trade data between Indonesia and the rest of the world, we disaggregate Indonesian trade data by trading partners and investigate the short-run as well as the long-run effects of the real bilateral exchange rate on the bilateral trade balance between Indonesia and each of her 13 trading partners. We find evidence of the J-curve effect in five out of 13 trading partners.

Ⅰ. Introduction

Ⅱ. The Model and the Method

Ⅲ. Empirical Results

Ⅳ. Summary and Conclusion

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