ANALISIS KINERJA NERACA PEMBAYARAN BERBASIS MODELMUNDELL-FLEMING: STUDI EMPIRIS PEREKONOMIAN INDONESIA, FILIPINA DAN THAILAND

Abstract

The weaknesses of external balance in a crisis need appropriate selection of policy of a country to adjust to the applied exchange rate system. This research was intended to analyze the interconnections of the performance of balance of payment, output level and exchange rates under the free floating exchange rate system in Indonesia and Philippinesand the controlled one in Thailand on the basis of Mundell-Fleming model. This research used analysis method of Error Correction Model (ECM). The results of this analysis provided a perspective that, in short-term, Indonesia is more appropriate to apply fiscal policy in addition to its monetary policy, and Philippine more appropriately applies monetary policy, but for Thailand, fiscal policy is very appropriate to apply. However, in the long term, all three countries can be influenced more by fiscal policy for stabilizing their economy. These facts are caused by the implementation of free floating exchange rate system which is still accompanied with tightness in stabilizing the volatility. The implications, in case of recession and intervention by fiscal expansion, indeed will increase output in short term; however, in the long term, the policy will appreciate the real exchange rate which can diminish the amount of output and makes the economy worse.