The Linkages of Financial Liberalization and Currency Stability: What do We Learn From Pre and Post Asian Financial Crisis?

Abstract

The tendency of repeating history has made any financial crisis a valuable source to be explored and studied. It will make people be more prepared and ready to anticipate. This paper examined the nature of linkages between exchange rate and macroeconomic fundamentals over [1997][1998][1999][2000][2001][2002][2003][2004]. It investigated the evidence on both the short-and long-run effects of exchange rate determinant factors using co-integration theory. It also explored the stability of rupiah during the pre and post economic crisis, seeking whether the Indonesian currency was overshooting or not. To test the stability of rupiah after monetary and fiscal liberalization, we employed the Chow test. The results revealed that the rupiah was overshooting during the crisis' period and there was a structural change of rupiah after 1998. Due to the significant effects of interest rate and exchange rate on the currency stability, it is important to the Indonesia's monetary institution to be aware of these two variables, especially in stabilizing the economic performance after the financial liberalization. The elasticity obtained for relative money supply (m) is greater than unity indicating that this result consistent with overshooting hypothesis.

The Influence of Work Discipline, Work Ethos and Work Environment on Employee Work Achievement: Lessons from Local Organization in an Emerging Country

“…This study is in line with the findings of previous studies, which found a significant relationship between work environment variables and employee performance (Akbar, 2017;Fatihudin, 2018;Putri et al, 2019;Pratomo & Warokka, 2013;Widodo, 2014). This finding means that every employee has well received the work environment in DPPKUKM to improve their performance.…”

Work Motivation as a Mediating Variable between Human Resources Competence and Organizational Climate against Job Satisfaction at the Yapen Islands Resort Police

“…The results of research conducted by Rosalia et al (2020), Carvalho et al (2020), Pratomo and Warokka (2013), dan Sohail et al (2014) prove that there is a positive influence between work motivation and job satisfaction. A person can feel job satisfaction when he has high motivation, skilled, and satisfied workforce (Saleem et al, 2010).…”

Short-Term Event-Driven Analysis of the South-East Asia Financial Crisis: A Stock Market Approach

“…Another event considered (event 2) was Indonesia letting its currency to free float in 14 August 1997 (Pratomo and Warokka 2013). This was arguably unavoidable after Thailand ended its peg a few weeks earlier with the Indonesian currency reserves coming under increasing pressure during those weeks.…”

“…The regime shift added significant amount of volatility to the exchange rate and increased economic pressure. Some authors, such as, for instance, Pratomo and Warokka (2013), have argued that the Indonesian rupiah was not a stable currency even before the South-East Asia financial crisis and that if more efforts were have done to stabilize it in the years before the crisis the rupiah should have hold substantially better during the crisis period.…”