The world economy is developing cyclically, so periods of recession and growth are characteristic of absolutely all countries with a market system of relations. Such cycles are characterized by periodic fluctuations in business activity in society.
History of world crises
The first known modern economic crisis occurred in 1821 in the UK. In 1936, crises broke out all over the same Great Britain and the USA, in 1841 and 1847 the second and third crisis covered the United States.
The first world economic decline is the crisis of 1857. Then, until the end of the century, three more crises hit the world. Then one of the most crushing crises of 1900-1901 happened, which paralyzed the economies of the USA and the Russian Empire and negatively affected the entire world metallurgical industry.
The crisis of 1929-1933 is still considered the most catastrophic for the global economy. The United States became its center, where it entered the history of the Great Depression. However, subsequently, the crisis swept the entire industrial world.
After World War II, economists noted a weakening of cyclical fluctuations in the economy. However, fluctuations began to occur with greater frequency, thereby clearly violating the classical theory.
What is characteristic of the modern crisis for the country?
Modern crises are characterized by a high inflation rate as a result of a sharp drop in prices. During this period, a sharp decline in production begins, accompanied by a constant decrease in business activity. The crisis is characterized by a drop in demand for the vast majority of goods and services, due to which there is a general surplus in the market. This, in turn, leads to a rapid decline in prices, a decline in the banking sector, a halt in production and rising unemployment.
A gradual decline in business activity in society and a slowdown in economic literature is called a recession. At a time when the slowdown is at a critical pace, an economic downturn begins. The lowest point of economic decline is called the economic crisis.
