Overlapping Crises and Trajectory Economic Growth of Indonesia


Authors : Yulia Indrawati; Muhammad Tojibussabirin; Hadi Paramu; I Made Suidarma

Volume/Issue : Volume 7 - 2022, Issue 9 - September

Google Scholar : https://bit.ly/3IIfn9N

Scribd : https://bit.ly/3D1chOr

DOI : https://doi.org/10.5281/zenodo.7212643

The impact of the global crisis which includes geopolitical, economic and existential (overlapping crises) has caused a scarring effect on economic performance. The post-recession economic growth trajectory is of urgency in calculating the impact of the shock caused by the prolonged crisis. This study aims to analyze the effect of overlapping crises represented by macroeconomic variables and shocks on the trajectory of economic growth in Indonesia at the short and long term. The type of data used in this study is time series with data sources are obtained from Bank Indonesia and the World Bank. The analytical method used the Vector Error Correction Model (VECM). The results of the study show that in the short term all variables do not significantly affect economic growth, while in the long term only inflation and non-energy commodity price crises have no effect on Indonesia's economic growth. The inflation variable is flexible, indicating the occurrence of a natural economic growth rate. Shock has implications for being aware of the potential risks of economic growth trajectories due to overlapping crises. A more active and effective mix of monetary and fiscal policies is needed to mitigate the scarring effect caused by the recession.

Keywords : Overlapping Crises; Trajectory; Economic Growth

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