Intertemporal Approach to the Current Account: Evidence from Malaysia and Indonesia (Pendekatan Intertemporal untuk Kedudukan Akaun Semasa: Bukti dari Malaysia dan Indonesia)

Hamizun Ismail, Ahmad Zubaidi Baharumshah, Ronald MacDonald

Abstract


ABSTRACT

This article presents an application of the intertemporal approach to the current account positions of Indonesia and Malaysia over the past four decades. Comparing the results for these two emerging market economies, the model performed noticeable better for Malaysia. Meanwhile, Indonesia’s external imbalances revealed the followings: deficits of the mid-1980s and 1990s prior to the 1997 crisis appeared to be an unsustainable path; surpluses during the post-crisis period deviated from the ‘optimal path’ significantly, implying that savings had reached a level that was beyond what would be required to support full ‘consumption-smoothing’; and capital movements appeared to be excessively volatile.

Keywords: Present value model; current account sustainability; consumption-smoothing; Asian crisis

ABSTRAK

Artikel ini memaparkan satu aplikasi pendekatan intertemporal terhadap kedudukan akaun semasa bagi Indonesia dan Malaysia dalam tempoh empat dekad yang lalu. Model yang diperoleh menunjukkan hasil yang lebih baik bagi data Malaysia berbanding dengandata Indonesia. Sementara itu, ketakseimbangan luar bagi Indonesia mendedahkan perkara- perkara berikut: defisit yang dialami sekitar tempoh pertengahan 1980-an dan 1990-an sebelum krisis kewangan pada tahun 1997 telah melalui satu laluan yang tidak teguh; secara signifikan, lebihan dalam tempoh pasca-krisis dengan jelas telah terkeluar daripada laluan yang optimum, menyarankan yang simpanan telah mencapai satu tahap yang melebihi daripada yang diperlukan untuk menanggung kelicinan perbelanjaan sepenuhnya; dan pergerakan modal menunjukkan kemeruapan yang berlebihan.

Kata kunci: Model nilai semasa; keteguhan akaun semasa; kelicinan perbelanjaan; krisis Asia

 


Full Text:

PDF

Refbacks

  • There are currently no refbacks.


DISCLAIMER

The editors and publisher of Jurnal Pengurusan have made every possible effort to verify the accuracy of all information contained in this publication. Any opinions, discussions, views and recommendations expressed in the article are solely those of the authors and are not of Jurnal Pengurusan, its editors or its publisher. Jurnal Pengurusan, its editors and its publisher will not be liable for any direct, indirect, consequential, special, exemplary, or other damages arising therefrom.