Economic crisis - what is this concept? The economic crisis of 1929-1933, 2008 and 2014. Causes of the economic crisis

2024 Author: Henry Conors | [email protected]. Last modified: 2024-02-12 02:41

Throughout the history of the development of the entire world society, the economies of most countries were shaken by crises, accompanied by a decrease in production, falling prices, an accumulation of unsold goods on the market, the collapse of banking systems, a sharp increase in unemployment, the ruin of most existing enterprises in industry and trade.

What is this - a crisis? What are its signs? How does it threaten the country's economy and us ordinary citizens? Is it inevitable and what can be done? Let's try to give at least approximate answers to most of the questions posed.

First of all, consider the crisis as a general concept.

This term is translated from Greek as "decisive transition", "global turning point", "severe state" of any process. In general, a crisis is a violation of the balance of any system and at the same time its transition to a new quality.

His role and stages

For all its painfulness, the crisis fulfillsuseful features. Like a serious illness that has struck a living organism, the accumulated hidden contradictions, problems and regressive elements undermine any developing system from the inside, whether it be a family, society or a separate part of it.

Because crises are inevitable, because without them it is impossible to move forward. And each of them performs three important functions:

removal or major transformation of obsolete elements of an exhausted system;
strength test and strengthening of its he althy parts;
clearing the way for creating elements of the new system.

In its own dynamics, the crisis goes through several stages. Latent (hidden), in which the prerequisites are brewing, but have not yet come out. The period of collapse, instant aggravation of contradictions, rapid and strong deterioration of all indicators of the system. And the stage of mitigation, transition to the phase of depression and temporary equilibrium. The duration of all three periods is not the same, the outcome of the crisis cannot be calculated in advance.

Characteristics and causes

There may be general and local crises. General - those that cover the entire economy as a whole, local - only part of it. There are macro and micro crises according to the problems. The name thus speaks for itself. The former are characterized by large scale and serious problems. The latter affect only a single problem or a group of them.

The causes of the outbreak of the crisis can be objective, emanating from cyclical needs for renewal, and subjective, resulting from political mistakes and voluntarism. Also theircan be divided into external and internal. The former are associated with the peculiarities of macroeconomic processes in the economy, as well as the political situation in the country, the latter with an ill-conceived marketing strategy, shortcomings and conflicts in the organization of production, illiterate management and investment policy.

The financial and economic crisis may result in renewal or final destruction of the monetary and economic system, its recovery or the next crisis. The exit from it can be sharp and sometimes unexpected or soft and long. This is largely determined by the policy of anti-crisis management. All shocks affect the state of power, state institutions, society and culture.

Essence of the economic crisis

The economic crisis is a sharp, sometimes landslide deterioration in the state of the economy of an individual country or a community of countries. Its signs are the disruption of industrial relations, the growth of unemployment, the bankruptcy of enterprises, and the general decline. The end result is a drop in the standard of living and well-being of the population.

Economic development crises are manifested in the overproduction of goods relative to demand, changes in the conditions for obtaining capital, mass layoffs and other social and economic shocks.

How is this happening?

Economy of any country in a specific period of time is in one of two states.

Stability when production and consumption (respectively -supply and demand) are generally balanced. At the same time, economic growth is on a straight path.
Imbalance, when the normal proportions of economic processes are disturbed, leading to a crisis state.

The economic crisis is a global imbalance of the financial and economic system. It is accompanied by the loss of normal links in the sphere of production and trade, and ultimately leads to a complete imbalance of the system.

What's going on in the economy

From the point of view of science, the economic crisis is a violation of the balance of supply and demand for goods and services.

The essence of it is observed in the excess production of goods compared to demand.

Modern economists characterize the crisis as a state of the economy in which it is doomed to internal and external changes. Its characteristics are strength, duration and scale.

At the same time, as already mentioned, the consequences of the economic crisis can be beneficial. Ultimately, it gives impetus to the development of the economy, having a stimulating function. Under its influence, production costs are reduced, competition is growing, and an incentive is created to get rid of obsolete means of production and upgrade on a new technical basis. Therefore, the crisis is the most important element of self-regulation of the market and economic system.

What is affected by the crisis

Industries that produce goods and durables tend to be hit hardest by downturns. Especially construction. Industries producing goods for short-termuse, react less painfully.

The way out depends on the causes that caused it. In order to eliminate the social economic crisis, the state should proclaim the transition to a normal economic regime as the main goal, for which it is necessary to pay off all existing debts, analyze the state of resources and prospects.

Now let's try to consider what is happening in society, with specific examples. Let us recall the most famous of the most difficult trials that shook the world economy in its time.

Let's go back in time

Crises have occurred throughout the history of society. The first of these, which hit the economies of the United States, England, Germany and France at the same time, happened in 1857. The impetus for its development was the collapse of the stock market and the bankruptcy of many railway companies.

Other examples are the Great Depression (1929-1933), the Mexican (1994-1995) and Asian crises (1997), and no doubt the Russian Crisis of 1998.

About the crisis of 1929-1933

The world economic crisis of 1929-1933 was by its nature a cyclic shock of overproduction. To it was added a general change in the economy, the beginning of which fell on the period of the war. It entailed a rapid increase in production, the strengthening of monopolies, which led to the impossibility of restoring after its end those economic relations that were before the war.

The features of the economic crisis of those years were manifested in the coverage of all, without exception,capitalist countries and all spheres of the world economy. Its uniqueness also lies in its extraordinary depth and duration.

Let's look at the causes of the economic crisis of those years in more detail.

What happened in the world

The period of stability in the 1920s was characterized by an increased growth in centralization and concentration of capital and production, which led to an increase in corporate power. At the same time, state regulation has sharply weakened. In the traditional sectors of the economy (shipbuilding, coal mining, light industry), the pace of development slowed down, and the unemployment rate rose. Agriculture is at risk of overproduction.

The economic crisis of 1929 led to a mismatch between the low level of purchasing power of the population and the large production possibilities. The bulk of capital investments were invested in stock speculation, which increased the instability of the economic environment.

The United States as the main international creditors doomed most of Europe to financial dependence. The lack of their own finances for most of them required free access of manufactured goods to the American market, but the resulting intensification of competition and the growth of customs duties became the reason for the countries' debt dependence on the United States.

Chronicle of the Great Depression

How did the economic crisis of 1929-1933 start? It happened on Black Thursday (October 24, 1929), when an unprecedented stock market panic arose in the United States. The value of the shares of the New York Stock Exchange fell by half (and even more). It became one of the firstmanifestations of an imminent crisis of unprecedented depth.

Compared to the pre-crisis level of 1929, US industrial output fell to 80.7% in 1930. The crisis led to a sharp collapse in prices, especially for agricultural products. Bankruptcy and ruin of commercial, industrial and financial enterprises acquired an unprecedented scale. The crisis also hit banks with devastating force.

What should have been done?

The Anglo-French bloc saw the solution to the problem in German reparation payments. But this path turned out to be untenable - Germany's financial capabilities were not enough, competitors limited its opportunities in international trade. The country's leadership sabotaged reparations payments, which required the provision of more and more loans to it and further upset the unstable international monetary system.

The economic crisis of 1929-1933 is known as one of the worst in the world economy. It took several long years for the world system to stabilize. Most countries have long suffered the consequences of this global economic shock that has gone down in history.

Crisis in 2008

Now let's consider the general patterns and characteristics of the concept under study using the example of such a well-known event as the economic crisis of 2008. His character has three important features.

The global crisis has affected almost all countries and regions. By the way, it had a stronger effect in successful ones, and stagnant places suffered inlesser degree. In Russia, too, most of the problems were observed in places and areas of the economic boom, in lagging regions, changes were felt minimally.
The economic crisis of 2008 was structural in nature, involving the renewal of the technological base of the entire global economy.
The crisis has acquired an innovative character, as a result of which financial innovations have been created and widely used as new market instruments. They radically changed the commodity market. The price of oil, which previously depended on the ratio of supply and demand, and therefore partially controlled by producers, has now begun to be formed in the financial markets by the actions of brokers trading in financial instruments associated with its supply.

The entire world community had to accept the fact that the virtual factor has become stronger in shaping the most important trends. At the same time, the political and economic elite lost control over the movement of financial instruments. Therefore, this crisis is called "the rebellion of machines against their own creators".

How it was

In September 2008, disaster strikes for all the world's offices - the New York Stock Exchange collapses. All over the world prices are falling rapidly. In Russia, the government simply closes the stock exchange. In October of the same year, it becomes finally clear that the global crisis is already inevitable.

The collapse of the world's largest banks is becoming an avalanche. Mortgage programs are curtailed,rising interest rates on loans. Steel-smelting enterprises stop blast furnaces, plants, lay off workers. Due to the lack of "long" money and loans, construction stops, new equipment is not purchased, and the machine-building industry falls into a stupor. The demand for rolled products is falling, the price of metal and oil is falling.

The economy turns into a vicious circle: no money - no wages - no work - no production - no goods. The cycle closes. There is such a thing as a liquidity crisis. Simply put, buyers have no money, goods are not produced due to lack of demand.

2014 economic crisis

Let's move on to current events. Without a doubt, any of us is concerned about the situation in the country in connection with recent events. Rising prices, depreciation of the ruble, confusion in the political arena - all this gives the right to say with confidence that we are experiencing a real crisis.

In Russia in 2014, the economic crisis is the deterioration of the country's economy due to a sharp decline in energy prices and the introduction of economic sanctions against Russia by Western countries. It manifested itself in a significant depreciation of the Russian ruble, an increase in inflation and a decrease in the growth of real incomes of Russians.

What are its prerequisites?

Since the beginning of the 2000s, priority development of the raw material sector has been observed in Russia. The active growth of world oil prices at the same time increased the dependence of the country's economy on the work of the energy-producing industries and on the external economic situation.

A falloil prices are caused by a decrease in demand for it, an increase in its production in the United States, and the refusal of other countries to reduce supplies. This led to a decrease in revenue from the sale of energy products, which is approximately 70% of all domestic exports. Other exporting countries - Norway, Kazakhstan, Nigeria, Venezuela - also felt the negative consequences due to the collapse in prices.

How it all started

What are the causes of the 2014 economic crisis? What exactly was the trigger? Due to the annexation of Crimea to Russia, considered by the EU countries as an annexation, sanctions were imposed on Russia, expressed in a ban on cooperation with military-industrial complex enterprises, banks and industrial companies. Crimea was declared an economic blockade. According to the President of Russia, the sanctions imposed against us are the cause of about a quarter of the country's economic problems.

Thus, the country is experiencing both an economic and a political crisis.

Stagnation continued in the first half of the year, economic indicators in 2014 fell below forecasts, inflation instead of the planned 5% reached 11.4%, GDP fell by 0.5% over the year, which has not been since 2008 d. The depreciation of the ruble on December 15 was a record, this day was called "black Monday". Separate exchange offices have decided to install five-digit currency boards in case of even greater growth of numbers on them.

On December 16, the national currency fell even more strongly - the euro exchange rate reached 100.74rub., dollar - 80.1 rub. Then there was some strengthening. The year ended at rates of 68, 37 and 56, 24 respectively.

The capitalization of the stock market has decreased, the RTS stock index has fallen to the last place, the fortunes of the richest Russians have decreased due to the devaluation of assets. Russia's credit rating in the world was downgraded.

What's happening now?

The economic crisis of 2014 is gaining momentum. In 2015, the problems in the country remained the same. The instability and weakening of the ruble persists. The budget deficit is expected to be much larger than predicted, the same applies to the fall in GDP.

Because of the sanctions, Russian companies lost their refinancing opportunities and began to turn to the state for help. But the total funds of the "Central Bank" and the reserve fund turned out to be less than the total external debt.

The prices of cars and electronics, actively bought up by the population in a panic, have increased. Excessive demand at the end of 2014 reigned in furniture, household appliances, and jewelry stores. People rushed to invest free funds in the hope of saving them from depreciation.

At the same time, the demand for everyday items, clothes and shoes fell. Due to rising prices, Russians began to save on the purchase of necessary household goods or buy the cheapest. Many foreign manufacturers of clothing and footwear of well-known brands were forced to curtail their activities in Russia due to lack of demand. Some shops have closed. Thus, the crisis in the country indirectly hit foreign investors as well.

Food prices have risen significantly. Before the onset of 2015, the population, fueled by rumors of an upcoming global rise in prices, began to sweep s alt and sugar off the shelves.

Many banks have suspended the issuance of consumer and mortgage loans, especially long-term, due to unclear financial conditions.

The social economic crisis hit the well-being of ordinary citizens. The real incomes of the population have fallen, and unemployment has risen. It was especially difficult for people with serious illnesses that require expensive medicines or treatment abroad.

At the same time, Russian goods have become more accessible to foreign tourists. Residents of Belarus, Kazakhstan, the B altic countries, Finland and China began to buy them.

Is there any good news?

During the past year, the Russian government tried to influence the economic crisis in the country. The "Central Bank" during the year raised the key rate six times, carried out foreign exchange interventions to stabilize the position of the ruble. Vladimir Putin recommended that the largest business representatives help the state by selling excess foreign currency on the domestic Russian market.

"The Central Bank" has softened the terms of foreign currency mortgages, the State Duma is planning measures to help borrowers who are faced with difficulties due to fluctuations in the exchange rate.

And yet, economists' forecasts for 2015 are not very optimistic. The crisis continues to rage, there is no decrease in its turnover yet. We all have a long way to go to fightdifficulties. It remains to take reasonable savings measures, limit costs and try to preserve existing jobs and other sources of income at any cost.