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The objective of this paper is to analyze the causal relationship between export and economic growth in Indonesia for the period of 1971-97. The method used in this study is almost similar to previous studies tarried out by Yung and Marshall (1935) and Dodaro (1993) It is concluded from the present study that there is no causal relationship between export and import growth, at least in the period under study. Nonetheless, combining this conclusion with those of previous studies, one mm? infer that export does affect economic growth at feast for the first fifteen years of development in Indonesia (1971-85} Sttch effects, however, would be getting weaker and weaker afterward. Since the current economic crisis could be considered as the starting point for another new economic development, export promotion seems to be a reasonable policy. Under the current exchange rate regime, exports of low-import content commodities, including agricultural commodities, have to be promoted. |
