| dc.description.abstract | This paper attempts to explain empirically the effect of order flow
as an unobserved variable on the exchange rate movements based
on the theory of scapegoat. The theory of scapegoat appears as
the answer to the imbalance in the relationship between macroeconomic
fundamentals and the exchange rate. To analyze the validity
of this theory in Indonesia, the Philippines, Malaysia, Singapore, and
Thailand (ASEAN 5), we apply the two-stage least squares method.
The empirical testing generates a fact that the paradigm of scapegoat
theory works for four countries, namely Indonesia, Malaysia, Singapore,
and Thailand. Another finding is that the theory of scapegoat
does not work for the Philippines. The implication of policy based
on the results is the emphasis of policy that enables intervention in
the foreign exchange market, the enhancement of monetary policy
transparency in each country, as well as the management of capital
flows more efficiently. | en_US |
