@article{pratomo2013linkages,
  title = {The Linkages of Financial Liberalization and Currency Stability: What do We Learn From Pre and Post Asian Financial Crisis?},
  author = {Wahyu Ario Pratomo and Suwandi and Ari Warokka},
  year = 2013,
  url = {https://ibimapublishing.com/articles/JESR/2013/235134/},
  journal = {Journal of Economics Studies and Research},
  volume = (2013),
  pages = 9,
  doi = 10.5171/2013.235134,
  abstract = {The tendency of repeating history has made any financial crisis a valuable source to be explored and studied. It will make people be more prepared and ready to anticipate. This paper examined the nature of linkages between exchange rate and macroeconomic fundamentals over 1997-2004. It investigated the evidence on both the short- and long-run effects of exchange rate determinant factors using co-integration theory. It also explored the stability of rupiah during the pre and post economic crisis, seeking whether the Indonesian currency was overshooting or not. To test the stability of rupiah after monetary and fiscal liberalization, we employed the Chow test. The results revealed that the rupiah was overshooting during the crisis' period and there was a structural change of rupiah after 1998. Due to the significant effects of interest rate and exchange rate on the currency stability, it is important to the Indonesia’s monetary institution to be aware of these two variables, especially in stabilizing the economic performance after the financial liberalization.  The elasticity obtained for relative money supply (m) is greater than unity indicating that this result consistent with overshooting hypothesis. },
  keywords = {Financial liberation, currency stability, cointegration theory, economic crisis.},
  note = Article ID: 235134
}