Analysis of Crude Oil Price and Exchange Rate Volatility on Macroeconomic Variables (Case Study of Indonesia as Emerging Economic Country)


Volume 5, Issue 5
Vietha Devia SS

Published online: 26 October 2019
Article Views: 25

Abstract

This study aims to look into the impact of crude oil prices and exchange rate volatility on domestic gasoline prices in Indonesia, as well as macroeconomic variables like consumption and GDP (GDP). The author took a case study in Indonesia as an emerging country and net oil importing country. The research was conducted from 2010 to June 2018. In 2013 and 2014, there were significant changes in crude oil prices and exchange rate. Therefore the research period is considered appropriate to determine impacts due to variable changes. The research method used path analysis. The data used was time series from 2010 to June 2018. The result indicates that crude oil prices and exchange rates have a significant positive effect on Indonesian Gasoline prices, Consumption, and GDP as the R2 obtained was 99.7%. Therefore it indicates that the utilised model can explain variable information up to 99.7%. In this study, in contrast to previous studies, the author examines both the impact of crude oil prices and the exchange rate on economic growth by including mediating variables such as domestic gasoline prices and domestic household consumption.

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To Cite this article

Devia SS, V. (2019). Analysis of crude oil price and exchange rate volatility on macroeconomic variables (case study of Indonesia as emerging economic country). International Journal of Business and Administrative Studies, 5(5), 257-271. doi: https://dx.doi.org/10.20469/ijbas.5.10001-5