The Influence of Central Bank Interest Rate, Real Exchange Rate, Economic Growth and Foreign Direct Investment on Current Account in G7 Countries

DOI

10.2991/aebmr.k.201126.030How to use a DOI?

Keywords

central bank interest rate, Real exchange rate and economic growth, current account

Abstract

This study aims to determine and analyze the effect of the central bank’s real interest rate on the G7 current account balance, the effect of the real exchange rate on the G7 current account balance, the effect of the output value on the G7 current account balance, the influence of the central bank’s real interest rate, the exchange rate real and joint output to the G7 current account balance. The types and sources of data that the authors use in this study are based on the nature of the data used is quantitative data because the data obtained are in the form of figures that represent the central bank’s real interest rates, exchange rates, outputs and the current account balance of the G7 countries, also based on time Data collected is time series data that is data collected from time to time from 2008-2017, and based on how to obtain it, the data used in this study are data sourced from the World Bank and OECD. Thus the data used is classified as secondary data. Based on the results of the processed data by panel regression analysis, a discussion of the results of research between the real exchange rate, interest rates, economic growth and foreign direct investment on the current account balance in the G-7 countries together or partially obtained the following conclusions: Real exchange rates, interest rates, economic growth and foreign direct investment together have a significant effect on α = 0.05 on the current account balance in G-7 countries. The real exchange rate has a negative and not significant effect at α = 0.05 on the current account balance in G-7 countries. Interest rates have a negative and significant effect at α = 0.05 on the current account balance in G-7 countries. Economic growth has a positive and not significant effect on α = 0.05 on the G-7 current account balance. Foreign direct investment has a positive and not significant effect at α = 0.05 on the G-7 current account balance.

Copyright

© 2020, the Authors. Published by Atlantis Press.

Open Access

This is an open access article distributed under the CC BY-NC license (http://creativecommons.org/licenses/by-nc/4.0/).

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TY  - CONF
AU  - Fajar Budiman
AU  - Sri Ulfa Sentosa
PY  - 2020
DA  - 2020/11/27
TI  - The Influence of Central Bank Interest Rate, Real Exchange Rate, Economic Growth and Foreign Direct Investment on Current Account in G7 Countries
BT  - Proceedings of the 5th Padang International Conference On Economics Education, Economics, Business and Management, Accounting and Entrepreneurship (PICEEBA-5 2020)
PB  - Atlantis Press
SP  - 266
EP  - 274
SN  - 2352-5428
UR  - https://doi.org/10.2991/aebmr.k.201126.030
DO  - 10.2991/aebmr.k.201126.030
ID  - Budiman2020
ER  -