Institute for Research on Economics and Society – Faculty of Economics and Business – University of Indonesia

Macroeconomic Analysis Series: Indonesia Economic Outlook, Quarter II-2021

The Covid-19 pandemic brought about an unprecedented crisis. In a theoretical context, the ongoing crisis is not caused by aspects related to the economy such as the collapse of the banking sector, bad credit, or high government debt. Therefore, the crisis we are currently facing has never been explained before in economics textbooks and has left all parties confused. After more than a year of living in pseudodystopian conditions, we have seen enough negative impacts for the government to take extraordinary policies that are no longer unfamiliar. Excessive government debt accumulation, central banks funding fiscal policy, and the fastest vaccine development in human history are occurring throughout the world in order to save human lives from the Covid-19 virus and keep the poorest groups able to meet their basic needs.

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