Financial Stress and Economic Activity Analysis in Indonesia

Authors

  • Sri Wulan Fatmawati  Department of Economics, IPB University, Bogor, Jawa Barat, Indonesia
  • Iman Sugema  International Center for Applied Finance and Economics, IPB University, Bogor, West Java, Indonesia
  • Syamsul Hidayat Pasaribu  International Center for Applied Finance and Economics, IPB University, Bogor, West Java, Indonesia

DOI:

https://doi.org/10.32628/IJSRSET2072123

Keywords:

Financial Stress, Economic, Vector Autoregressive (VAR)

Abstract

Financial Stress marks the beginning of a crisis and may occur in all countries. This period is certainly unanticipated as it may disrupt a country's financial and monetary stability. An unstable financial system tends to be vulnerable to various stresses and may also hinder the transmission of monetary policy to function normally, thus resulting in ineffective monetary policy. This study aims to analyze financial and monetary stability in Indonesia using time series monthly data from January 1996 to January 2018. We used Vector Autoregressive (VAR) model. Our estimates suggest that the response of consumer price index to financial stress index takes longer to stabilize. This also applies to consumer price index response to consumer price index.

References

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International Journal of Scientific Research in Science, Engineering and Technology

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Published

2020-04-30

Issue

Volume 7, Issue 2, March-April-2020

Section

Research Articles

License

Copyright (c) IJSRSET

Creative Commons License

This work is licensed under a Creative Commons Attribution 4.0 International License.

How to Cite

[1]
Sri Wulan Fatmawati, Iman Sugema, Syamsul Hidayat Pasaribu "Financial Stress and Economic Activity Analysis in Indonesia" International Journal of Scientific Research in Science, Engineering and Technology (IJSRSET), Print ISSN : 2395-1990, Online ISSN : 2394-4099, Volume 7, Issue 2, pp.637-643, March-April-2020. Available at doi : https://doi.org/10.32628/IJSRSET2072123