THE IMPACTS OF EXPORTS, IMPORTS, AND EXCHANGE RATES ON ECONOMIC GROWTH IN INDONESIA

Abstract

This paper attempts to investigate the impacts of exports, imports, and exchange rates on the
economic growth of Indonesia using the Vector Error Correction Model (VECM) for the
period of 1981-2016. Data was utilized from world development indicators, the Ministry of
Industrial Department of the Republic of Indonesia, and the World Bank. The results show
that there are long-run and short-run causalities from exports, imports, and exchange rates to
the GDP. The aim of this study is to analyze the impacts of exports, imports, and exchange
rates on the GDP. The results of this study are very important for policymakers to determine
the appropriate steps, strategies, as well as policies.