Effect of Exchange Rates and Information and Communication Technology on Indonesia’s Economic Growth A Nonlinear Autoregressive Distributed Lag Approach
Main Article Content
Keywords
Economic growth, exchange rate, exchange rate asymmetry, ICT, NARDL model
Abstract
Foreign exchange rates as well as information and communication technology (ICT) are crucial in the global economy. Exchange rates affect trade balance, which influences gross domestic product (GDP) and economic growth. ICT also affects economic growth by reducing business transaction costs and increasing the income of investors and companies, stimulating national income and economic growth. This research examines the effect of exchange rate asymmetry and ICT on Indonesian economic growth, using annual time-series data on exchange rates, ICT usage (proxied by Internet, telephone, and mobile phone users), and economic growth (GDP from 1994 to 2018). The data were analyzed using a non-linear auto-regressive distributed lag model. The results show that the exchange rate exerts an asymmetric effect on long-term economic growth. ICT has short- and long-term positive effects on economic growth. According to the findings, the Indonesian government should stabilize the IDR/USD exchange rate through monetary policies to encourage economic growth. Monetary policy needs also to support IDR/USD exchange rate appreciation to enhance the trade balance, GDP, and economic growth. The economic growth of Indonesia, which is driven by ICT development, still needs to be sustained by the government initiating ICT development in cities and rural areas.
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References
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Dec 15, 2023
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Rumbia, W. A., Jabani, A., Adam, P., Abbas, B., Nur, M., & Pasrun, Y. P. (2023). Effect of Exchange Rates and Information and Communication Technology on Indonesia’s Economic Growth: A Nonlinear Autoregressive Distributed Lag Approach. Journal of Telecommunications and the Digital Economy, 11(4), 13–32. https://doi.org/10.18080/jtde.v11n4.743
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Author Biographies
Wali Aya Rumbia, Department of Economics, Universitas Halu Oleo
Wali Aya Rumbia obtained a doctorate in economics from Universitas Halu Oleo, Kendari, Indonesia in 2016. Currently she is a permanent teaching staff at the Economics and Development Studies Study Program, Universitas Halu Oleo, Kendari, Indonesia. Her field of research is involved in economics.
Asrul Jabani, Sekolah Tinggi Ilmu Ekonomi Enam-Enam, Kendari, Indonesia
Asrul Jabani obtained a master's degree in economics from Universitas Halu Oleo, Kendari, Indonesia in 2016. Currently he is a teaching staff at the Management Study Program, Sekolah Tinggi Ilmu Ekonomi Enam-Enam, Kendari, Indonesia. His field of research is involved in economics.
Pasrun Adam, Sekolah Tinggi Ilmu Ekonomi Enam-Enam, Kendari, Indonesia
Pasrun Adam completed his doctoral education at Universitas Halu Oleo, Kendari, Indonesia in the field of economics in 2015. Now he teaches at Sekolah Tinggi Ilmu Ekonomi Enam-Enam, Kendari, Indonesia. His research fields are applied economics and mathematical economics.
Bakhtiar Abbas, Sekolah Tinggi Ilmu Ekonomi Enam-Enam
Bakhtiar Abbas obtained a doctorate in Management from Universitas Halu Oleo, Kendari, Indonesia in 2016. Currently he is a permanent teaching staff at the Management Studies program, Sekolah Tinggi Ilmu Ekonomi Enam-Enam, Kendari. Indonesia. His research fields is involved in economics and management.
Muh Nur, Sekolah Tinggi Ilmu Ekonomi Enam-Enam
Muh Nur obtained a doctorate in Economics from Universitas Halu Oleo, Kendari, Indonesia in 2017. Currently he is a permanent teaching staff at the Management Studies program, Sekolah Tinggi Ilmu Ekonomi Enam-Enam, Kendari. Indonesia. His research is involved in economics.
Yuwanda Purnamasari Pasrun, Department of Information Systems, Universitas Sembilanbelas November
Yuwanda Purnamasari Pasrun is a lecturer in the information systems study program, USN Kolaka. Bachelor's and master's degrees are majoring in informatics engineering with a specialization in data mining and intelligent computing.
