The various crises are clearly intertwined in a number of ways. Some have claimed that it is just a matter of time, say a bottleneck; others argue this is a crisis of the free market model. And still other believe this is a crisis of civilization.
An economic crisis is a situation in which the economy of a country experiences a sudden downturn brought on by a financial crisis. An economy facing an economic crisis will most likely experience a falling GDP, a drying up of liquidity and rising/falling prices due to inflation/deflation. An economic crisis can take the form of a recession or a depression. In any complex system, a crisis is a period of where the system functions very poorly, warranting immediate corrective action. During this time, the value of institutions, especially financial institutions, drops at unprecedented speeds and everything seems to be valueless. Production is low and often fails to meet the level of demand.
The current economic crisis is a consequence of the prevailing model of production in the today's world. The model involves several phases that occur cyclically. Now we are in the hardest phase of the crisis, but some countries are already moving out of it very slowly into a recovery phase where the consumption levels grow as well the production of goods in order to satisfy the increase in demand. The objective of economic recovery when in crisis is to stabilize the economy, and from there recapture the value lost through economic stimulus strategies while addressing the factors which contributed to the collapse in the first place. This phase always precedes another of depression that will back up to a new crisis opening another economic cycle, as has been happening in the last two centuries.
The characteristic of the current crisis is that has affected almost all countries and regions, but this time hit much harder to European countries and to the U.S., where the crisis originated. Luckily, the current crisis hit with much less force to countries in Asia and Latin America who have known how to handle the current crisis much better than on previous occasions.
Thank you very much dear Jorge. Your answer us clear and succinct concerning the economic crisis. Yet, that crisis is not - and cannot - be separated from other types or crises, namely environmental, social, political, trust, values crises, to name just some. And of course, I do not mean to thin about them in causal terms; that would simplify too much the topic. Would you agree?
Yes, you are right when we talk about the economic crisis we have to look for another type of crisis such as, financial crisis, political crisis, social crisis, environmental crisis, values crisis, etc. All of them are interconnected.
And the interconnectedness of them all is what sheds lights on a larger scope, namely the possibility that either "our" world or even perhaps our civilization might be going into a false or wrong track. Would you agree?
In a sense, yes, I also believe that the world is going in a wrong direction. It is difficult to accept that we are going in the correct direction when people living in poverty are increasing instead of decreasing, the number of limited wars are increasing instead of decreasing, terrorism activities are increasing in some regions of the world, resources for education and health care are decreasing and resources allocated to make wars and the production of military equipment of all types are increasing instead of decreasing and the list could be very long in support the view indicated.
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