Nofita Wulansari
Department of Economics and Development Studies, Faculty of Economics and Business. Universitas Jember

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STUDY OF CYCLICITY AND MACROECONOMIC IMPACT ON INVEST- MENT FLOWS IN EAST JAVA Ariz Aprilia; Nofita Wulansari
East Java Economic Journal Vol. 1 No. 1 (2017)
Publisher : Kantor Perwakilan Bank Indonesia Provinsi Jawa Timur

Show Abstract | Download Original | Original Source | Check in Google Scholar | Full PDF (630.815 KB) | DOI: 10.53572/ejavec.v1i1.7

Abstract

This paper aims to analysis the cyclicity pattern and to estimates the effect of macroeconomics indicators on capital inflows in East Java. The first analysis by using Hodrick-Prescott (HP) filter shows that capital inflows in East Java have a tendency to move in procyclical pattern. While the second by using VAR analysis shows that macroeconomics indicators are dominant factor for investors to invest their funds in East Java. Likewise, this paper indicates the pattern of capital inflows in East Java is tend to procyclical. Moreover,the macroeconomics indicators that affect capital inflows in East Java are economic growth and inflation. Based on the result, this paper suggest for local governments to synchronize the development of capital inflows together with macroeconomics conditions. Furthermore, the capital inflows can be managed properly to avoid the “surges” and “sudden stop” phenomenon.