Uji Kausalitas : Utang Luar Negeri dan Capital Flight di Indonesia, 1974-2002
The study examines a causal relationship between external debt and capital flight of Indonesia for the period 1974-2002. We use error correction model to examine a causal relaÂ¬tionship. We find external debt related to capital flight on Indonesia as a feedback/bilateral causality. This empirical evidence supports the debt fueled capital flight and flight fueled external borrowing hypothesis.
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Keywords: causal relationship, external debt, capital flight
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