MACROECONOMIC IMPACT ON BALANCE OF PAYMENTS UNDER DIFFERENT EXCHANGE RATE SYSTEMS

Abstract

Abstract

        This study aims to study the macroeconomic factors affecting the balance of payments under different exchange rate systems. The study covers four countries with different exchange rate systems: Greece and Ecuador, while Thailand and Indonesia use the floating exchange rate system. This study is a quantitative study and interprets the data obtained from the analysis. The research method is to study the fiscal policy and balance of payments in four countries that use the fixed exchange rate system. The case study countries are Greece and Ecuador, and the sample countries that use the floating exchange rate system are Thailand and Indonesia. The study is conducted between 1993 and 2022, a total of 30 years, which is the period when the Thai economy is in both the economic slowdown and economic growth periods. The data on the balance of payments value, macroeconomic factors, and the fixed and floating exchange rate values ​​are used.

        From the study 1) The macroeconomic impact on the balance of payments under the fixed exchange rate system, including Greece and Ecuador, government expenditure (G_i,t) affects the balance of payments because when government expenditure increases, the balance of payments will increase as well. 2) The macroeconomic factor of real income (Y_i,t) has no relationship with the balance of payments. And the macroeconomic impact on the balance of payments under the floating exchange rate system, including Thailand and Indonesia. 1) The macroeconomic factor of exchange rate (Ex_i,t) affects the balance of payments because when the exchange rate increases, the balance of payments will increase as well. 2) The macroeconomic factor of money supply (M_i,t) has no relationship with the balance of payments.