Early Warning System Financial Crisis: Economic Factors and Political Factors

Catherine  Rachel Bunga Adjani; Nurbetty  Herlina Sitorus

doi:10.54443/sj.v2i6.275

Authors

Catherine Rachel Bunga Adjani University of Lampung, Indonesia
Nurbetty Herlina Sitorus University of Lampung, Indonesia

DOI:

https://doi.org/10.54443/sj.v2i6.275

Keywords:

Early Warning System, Financial Crisis, Inflation, GDP, Interest Rates, Political Stability

Abstract

This study aims to determine the right indicators in making a financial crisis early warning system by combining economic and political factors. This research is descriptive research with a quantitative approach. The data used are secondary data collected through the official website of the institution and data publications, with variables Financial Crisis, GDP, inflation, interest rates, and political stability. The scope of this study is annual data from Indonesia, South Korea, Malaysia, the Philippines, and Thailand from 1996 to 2022. The data was analyzed through the logit method, with dependent variables 0 and 1. The results showed that the variables inflation, GDP, and domestic credit had a significant effect on the occurrence of the financial crisis.

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