Analysis of Indonesia’s Coffee Exports to the United States in 1996-2018

Abstract

The study examines the effect of macroeconomy factors on Indonesian coffee exports to the United States in the short term and long run. The three macroeconomy factors that being investigated are the inflation rate, the United States dollar exchange rate, and Indonesian coffee production. The determinant of Indonesian coffee exports to the United States is estimated using the Vector Error Correction Model (VECM). This study is using secondary time series data from 1996 to 2018. The results of this study indicate that in the short term and long run, the inflation rate has a negative impact on Indonesian coffee exports to the United States. The United States dollar exchange rate has a positive impact in the short term and negative impact in the long run to the Indonesian coffee exports to the United States, and Indonesian coffee production has a positive impact in short term and the long run to the Indonesian coffee exports to the United States. The findings of this study suggest that Indonesian coffee production plays an important impact in the short term and long run. Also, the interaction between the inflation rate and the United States dollar exchange rate indicates a more factual impact in the long run.