UPM Institutional Repository

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


Ismail, Hamizun and Baharumshah, Ahmad Zubaidi and MacDonald, Ronald (2013) Intertemporal approach to the current account: evidence from Malaysia and Indonesia. Jurnal Pengurusan, 37. pp. 3-13. ISSN 0127-2713


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: deficits 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.

Download File

Intertemporal approach to the current account.pdf

Download (180kB) | Preview

Additional Metadata

Item Type: Article
Divisions: Faculty of Economics and Management
Publisher: Penerbit Universiti Kebangsaan Malaysia
Keywords: Present value model; Current account sustainability; Consumption-smoothing; Asian crisis
Depositing User: Nabilah Mustapa
Date Deposited: 27 Apr 2015 02:15
Last Modified: 22 Sep 2015 01:33
URI: http://psasir.upm.edu.my/id/eprint/28316
Statistic Details: View Download Statistic

Actions (login required)

View Item View Item