Modelling of the Dynamics of Relationship between World Crude Oil Prices and Indonesia’s Trade Balance: An LVAR Analysis

Pasrun Adam, Usman Rianse, Edi Cahyono, Manat Rahim, Muhammad Syarif, Gamsir .


This paper aims to examine the long-term dynamics of relationship between world crude oil prices and Indonesia’s trade balance, and establish a model of the relationship dynamics. The data used were the monthly data covering the period from January 2004 to October 2014, and were analyzed by using the LVAR (p, q) causal model proposed by Agung (Time series data analysis using eview. Singapore : John Wiley & Son, 2009). Results of data analysis demonstrated a significant long-term dynamic relationship between world crude oil prices and Indonesia’s trade balance. The relationship between those two variables was negative, i.e., if the prices of world crude oil increase, the trade balance decreases.

Keywords : Crude oil price, trade balance, LVAR analysis


Full Text: PDF
Download the IISTE publication guideline!

To list your conference here. Please contact the administrator of this platform.

Paper submission email:

ISSN (Paper)2222-1700 ISSN (Online)2222-2855

Please add our address "" into your email contact list.

This journal follows ISO 9001 management standard and licensed under a Creative Commons Attribution 3.0 License.

Copyright ©