The Effects of Exchange Rates, Exports, and Imports on Economic Growth in Indonesia, 2011–2025

Abstract

This study aims to examine the short-term and long-term effects of the exchange rate, exports, and imports on economic growth in Indonesia. This study employs a quantitative approach using an associative research design. The data used in this study are secondary data in the form of quarterly Indonesian data for the period 2011–2025, obtained from the Central Statistics Agency (BPS) and Bank Indonesia (BI). The data analysis methods employed include stationarity tests, cointegration tests, determination of the optimal lag, causality tests, the Vector Error Correction Model (VECM), the Impulse Response Function (IRF), and Variance Decomposition (VD), all conducted using EViews 13 software. The results of this study indicate that, in the long run, the exchange rate, exports, and imports have a significant effect. In the short run, the exchange rate and imports also have a significant effect, but the export variable does not have a significant effect. The study identified a gap in the literature, namely differing findings regarding the effects of exports, imports, and the exchange rate on economic growth. Some studies have found that exports have a significant positive effect, while others have found no significant effect. Furthermore, most studies use annual data and regression methods, which do not allow for a simultaneous explanation of both short-term and long-term relationships