SYNCHRONICITY OF MACRO ECONOMIC VARIABLES AMONG ASEAN MEMBER COUNTRIES

Abstract

This research aimed at analyzing synchronicity of macro economic variables among the ASEAN countries comprising Indonesia, Malaysia, Philippines, Singapore, and Thailand by using time-series secondary data from 1980-2010, totaling 31 years. The data were collected from International Monetary Fund (IMF) and World Bank and analyzed by Pearson Correlation Coefficient.

The result reveals that there was synchronicity among ASEAN members in terms of real GDP growth, real interest rate, degrees of openness, and the change of local currency per USD while the variable which has low synchronicity was inflation rate. When considering each country, it was found that Indonesia, Malaysia, Singapore and Thailand were countries with synchronicity of economic variables. However, Philippines had low synchronicity. When considering the whole picture of ASEAN, synchronicity of macro economic variables was found at a moderate level. Therefore, ASEAN should have a mutual policy of handling inflation in each country to maintain synchronicity before having a common currency area. In addition, there should be a shared mechanism in economic management for ASEAN in order to develop an economic union to be Asian Union in the near future.