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.

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.

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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