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

Hamizun Ismail, Ahmad Zubaidi Baharumshah, Ronald MacDonald

Research output: Contribution to journalArticle

1 Citation (Scopus)

Abstract

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: defc]its 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.

Original languageEnglish
Pages (from-to)3-13
Number of pages11
JournalJurnal Pengurusan
Volume37
Publication statusPublished - 2013

Fingerprint

Indonesia
Malaysia
Intertemporal approach
Current account
Capital movements
Consumption smoothing
Savings
External imbalances
Optimal path
Emerging market economies
Surplus

Keywords

  • Asian crisis
  • Consumption-smoothing
  • Current account sustainability
  • Present value model

ASJC Scopus subject areas

  • Business, Management and Accounting (miscellaneous)
  • Accounting
  • Business and International Management

Cite this

Intertemporal approach to the current account : Evidence from Malaysia and Indonesia. / Ismail, Hamizun; Baharumshah, Ahmad Zubaidi; MacDonald, Ronald.

In: Jurnal Pengurusan, Vol. 37, 2013, p. 3-13.

Research output: Contribution to journalArticle

Ismail, Hamizun ; Baharumshah, Ahmad Zubaidi ; MacDonald, Ronald. / Intertemporal approach to the current account : Evidence from Malaysia and Indonesia. In: Jurnal Pengurusan. 2013 ; Vol. 37. pp. 3-13.
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