The Correlation of Exchange Rate and Inflation and Its Effect on Stock Markets. Case Study on Consumer Good Index Indonesia: 2004 – 2017
Journal Title: Academic Journal of Economic Studies - Year 2019, Vol 5, Issue 2
Abstract
The purpose of this study is to see whether inflation and exchange rates have a two-way relationship and their influence on the stock market case study on the Consumer Good Index. In the first session the author wrote the introduction of the important of researching this topic, session two literature reviews about exchange rates, inflation and the stock market, the third session about the research methods and the fourth session described the overall discussion. The data used are monthly time series data from 2004 to 2017 and the estimation model used the VAR model. The exchange rate used Rupiah against U$D and inflation measure used Consumer Price Index. The results show that inflation do not affect the exchange rate, but the exchange rate significantly affect the inflation rate. As the stock market, there is a continuing decline or negative movement when inflation increased. Then when the Rupiah exchange rate continues to show a depreciating trend, the movement of the stock market seems to be decreasing.
Authors and Affiliations
Devia S. S. Vietha
Keywords
Related Articles
- EP ID EP598384
- DOI -
- Views 75
- Downloads 0
Public Debt Spiral and Domestic Investment in Nigeria
The nature of Nigeria economy is such that borrowing has become the business of every government in power. Most often, in order to finance the deficit in the budget, the government would resolve to borrowing. However, th...
Sources of Ethiopia’s Export Growth: a Constant Market Shares Decomposition Analysis
Ethiopia’s exports grew by more than 700% in real terms between 1995 and 2014. For a landlocked country depending much on primary products and with little success in export diversification, the growth recorded over the p...
An ARDL Approach to the Government Expenditure and Economic Growth Nexus in Nigeria
This study majorly aims at investigating the impact of government expenditure on economic growth by controlling FDI inflow as additional variable for the timeframe from 1981 to 2016. The inclusion of FDI inflow in the mo...
Modelling and Predicting the Fiscal Pressure Indicator in the European Union
The main goal of this research is to model and predict the fiscal pressure indicator and the real GDP rate in the European Union during 1996-2013 using the vectorial autoregressive approach. According to Granger test for...
The Dilemma of the Oil Market in the Current Geopolitical Context
In an increasingly globalized world, where the effects of technology have an overwhelming impact on people's lives, meaning an increase in appetite for consumption of luxury goods, of lifestyle, it seems that conventiona...