ECONOMIC GROWTH OF INDONESIA: LARGE DOMESTIC DEMAND BUT STILL EXPORT-LED
Abstract
Trade policies nowadays must take into account that economies are now more open. This paperuses vector autoregression (VAR) model to assess whether the economic growth of Indonesia is export-led.
Estimation results suggest that Indonesian economic growth has been stimulated by export performance,
although domestic demand has contributed significantly. Indeed, our research indicates that exports also
play a significant role in affecting variation in domestic demand, and thus suggests the importance for
Indonesia of being more competitive in international trade to maintain economic growth.
Keywords: International trade, Economic growth
Published
2012-11-15
Section
Article
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