Economic Crises: A Review and Directions for Research

Abstract

This study examines the experience Indonesians had during the 1997/98 Asian financial crisis, the 2008/09 global financial crisis, and the 2020/2021 COVID-19 pandemic crisis. Specifically, this study, which has theoretical and practical contributions, addresses two research questions based on national data on macroeconomic variables, including economic growth, employment, and poverty. The first question focuses on the main transmission channels through which these three crises affected the economy. The second question addresses the impacts of these crises on economic growth, employment, and poverty. The findings suggest that crises have different transmission channels through which the economy is affected. This is because an economic crisis may not affect all businesses or sectors. It mainly depends on the type of crisis and the transmission channels. Furthermore, this study has two policy implications, including making fiscal stimulus packages to promote economic recovery effectively. Since the most affected companies need to be identified first, the type of crisis and its main transmission channel, as well as the related business risks need to be determined. Second, the stimulus needs to be in line with crisis adjustment or mitigation measures adopted by the targeted companies. This means the fiscal stimulus packages should complement the adopted crisis mitigation measures. Therefore, various measures in response to business risks need different policy approaches and stimulus packages. © 2022 by Nova Science Publishers, Inc.