ENGR.ECONOMIC ANALYSIS
14th Edition
ISBN: 9780190931919
Author: NEWNAN
Publisher: Oxford University Press
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Transcribed Image Text:In 1997/1998 the Indonesian economy was severely hit by the economic crisis, which
was then followed by the fall of the New-Order regime. This event brought about
political instability and the weakening of a number of macroeconomic indicators. The
phenomenon of capital flight began when investors decided to pull some of their
valuable assets out of Indonesia and move them to "safer" countries. Provide your
analysis on the implications of this crisis to the market for loanable funds, net capital
outflow, and the exchange rate in Indonesia.
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