The Impact of US Crisis on Trade and Stock Market in Indonesia | Zendy

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The Impact of US Crisis on Trade and Stock Market in Indonesia

Author(s) -

Mita Nezky

Publication year - 2013

Publication title -

deleted journal

Language(s) - English

Resource type - Journals

SCImago Journal Rank - 0.505

H-Index - 4

ISSN - 2460-9196

DOI - 10.21098/bemp.v15i3.428

Subject(s) - economics , stock market , monetary economics , financial crisis , exchange rate , stock market index , index (typography) , stock (firearms) , international economics , capital market , indonesian , volatility (finance) , stock exchange , macroeconomics , financial economics , finance , mechanical engineering , paleontology , linguistics , philosophy , horse , world wide web , computer science , biology , engineering

This paper analyzes the impact of the financial crisis in United States 2008 on Indonesia’s economy, by using Structural Vector Autoregressive (SVAR) model of 5 variables; Dow Jones Industrial Average, exchange rate, composite stock price index (IHSG), production index and trade tax income. The result shows that the US crisis affects the capital market in Indonesia where the Dow Jones Industrial Average plays greater role in explaining the IHSG, compared to Rupiah rate, production index and the trade income tax. In addition, the US crisis affects the volume and the trade income tax in Indonesia. These empirical results bring policy implication for Bappepam-LK as stock market regulator to intervene or to suspend the trade when the volatility exceeds the psychological threshold. It also emphasizes the necessity to diversify the export country destination and to increase the quality and the value added of Indonesian export. Keywords : US Crisis, stock market, trade, SVAR. JEL Classification : G18

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