Booms, recessions, and crises
Map how an economic shock may spread and state assumptions.
One household may reduce spending to cope with uncertainty. If many do so, some firms may lose revenue and reduce purchasing or hiring. Economy-wide analysis must trace interactions rather than simply scale up one household’s reasoning.
In an original scenario, lower tourism reduces hotel revenue and purchases from suppliers. Each link needs conditions: cash buffers, alternative customers, and spending elsewhere may change the result. An arrow shows a possible mechanism, not destiny.
Crises can involve demand, supply, finance, or external shocks. Understanding one mechanism does not predict the next crisis. Policies have timing, constraints, and costs; state the setting rather than promising a universal cure.
Make your understanding visible
Write three steps in a tourism shock and one factor that might interrupt it.
Compare with a reference response
Fewer visitors → lower hotel revenue → fewer supplier orders. Cash buffers or other customers may soften the shock, but evidence is needed.