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Intertemporal approach to the current account: evidence from Malaysia and Indonesia

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...

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Main Authors: Ismail, Hamizun, Baharumshah, Ahmad Zubaidi, MacDonald, Ronald
Format: Article
Language:English
Published: Penerbit Universiti Kebangsaan Malaysia 2013
Online Access:http://psasir.upm.edu.my/id/eprint/28316/1/Intertemporal%20approach%20to%20the%20current%20account.pdf
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spelling oai:psasir.upm.edu.my:28316 http://psasir.upm.edu.my/id/eprint/28316/ Intertemporal approach to the current account: evidence from Malaysia and Indonesia Ismail, Hamizun Baharumshah, Ahmad Zubaidi MacDonald, Ronald 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. Penerbit Universiti Kebangsaan Malaysia 2013 Article PeerReviewed application/pdf en http://psasir.upm.edu.my/id/eprint/28316/1/Intertemporal%20approach%20to%20the%20current%20account.pdf Ismail, Hamizun and Baharumshah, Ahmad Zubaidi and MacDonald, Ronald (2013) Intertemporal approach to the current account: evidence from Malaysia and Indonesia. Jurnal Pengurusan, 37. pp. 3-13. ISSN 0127-2713 http://ejournals.ukm.my/pengurusan/article/view/3622
institution UPM IR
collection UPM IR
language English
description 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.
format Article
author Ismail, Hamizun
Baharumshah, Ahmad Zubaidi
MacDonald, Ronald
spellingShingle Ismail, Hamizun
Baharumshah, Ahmad Zubaidi
MacDonald, Ronald
Intertemporal approach to the current account: evidence from Malaysia and Indonesia
author_facet Ismail, Hamizun
Baharumshah, Ahmad Zubaidi
MacDonald, Ronald
author_sort Ismail, Hamizun
title Intertemporal approach to the current account: evidence from Malaysia and Indonesia
title_short Intertemporal approach to the current account: evidence from Malaysia and Indonesia
title_full Intertemporal approach to the current account: evidence from Malaysia and Indonesia
title_fullStr Intertemporal approach to the current account: evidence from Malaysia and Indonesia
title_full_unstemmed Intertemporal approach to the current account: evidence from Malaysia and Indonesia
title_sort intertemporal approach to the current account: evidence from malaysia and indonesia
publisher Penerbit Universiti Kebangsaan Malaysia
publishDate 2013
url http://psasir.upm.edu.my/id/eprint/28316/1/Intertemporal%20approach%20to%20the%20current%20account.pdf
_version_ 1782720353641955328
score 12.935284

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