Title: What do macroeconomic composite indexes say about Indonesia's economic networks?

Authors: Kiki Verico

Addresses: Faculty of Economics and Business, The Institute for Economic and Social Research, University of Indonesia (LPEM FEB UI), Jalan Salemba Raya No 4, Kampus UI Salemba, 10430, Jakarta Pusat, Indonesia

Abstract: Every country always tries to put its best efforts into being competitive in trade and long-run investment globally, as both the surplus in trade and long-term investment is necessary for accelerating economic growth. This paper attempts to construct composite indexes to measure the bilateral economic relations degree between Indonesia and its major economic partners and define potential economic networks in trade or long-run investment. This paper transforms 17 macroeconomic indicators into 15 composite indexes used to analyse bilateral economic relationship degrees and describe trade and long-term investment patterns afterward. This paper takes 17 of Indonesia's major trading partners, covering more than 80% of Indonesia's export value. The novelties of this paper are showing bilateral economic relationship degrees between Indonesia and each of its selected major trading partners, describing their production network patterns, and supporting Indonesia's potential sources of economic growth.

Keywords: macroeconomic data; open economy; foreign direct investment; global outlook; economic integration; Indonesia.

DOI: 10.1504/IJTGM.2023.136122

International Journal of Trade and Global Markets, 2023 Vol.18 No.4, pp.339 - 367

Received: 30 Oct 2021
Accepted: 22 Apr 2022

Published online: 17 Jan 2024 *

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