With a globalized system, a credit crunch can cause a ripple effect in the entire economy and very quickly turning a global financial crisis into a global economic crisis. The subprime mortgage crisis led to the failure and closure of large financial institution one of which was the collapse of Lehman Brothers in September 2008. This sent a wave of fears around the world in the financial markets. Large projects were called off, corporate sector stopped borrowing due to high interest rates, trade credit was impossible to attain, with falling demand, particularly for investment goods and manufacturing durables such as automobiles, trade volume collapsed. The crisis had threatened the collapse of many other large financial institutions but was prevented by the bailout of banks by national governments.
But, like before how Catalan had a minor effect on the stability of prices in Spain, it has a major effect on its growth. The ways in which Spain will either fall hard or continue to grow lies in the hands of Catalan because they have without thought “put all their eggs in one basket” becoming overly dependent on Catalan. The effects of Catalan becoming dependent from Spain would hit the GDP hard, decreasing it by an estimated 13%. Although only 15% of the population of spain liv in Catalan together they create one fifth of the GDP of Spain. There small size surely would not suggest this.
If the economy does not generate sufficient jobs for the new entrants in the labour force, the demographic dividend is likely to turn into demographic disaster. The experience of the two decades of economic reforms does not generate optimism in this regard. The acceleration in the growth rate witnessed in the post reform period is not matched by growth in employment. During 2004-05 to 2011-12, employment in the Indian economy increased by a mere 74.9 million at a CAGR of only 0.5 per cent. Moreover, the quality of employment has worsened during the period as most of the jobs have been created in the low productivity agriculture and informal non-agricultural
The trend of deflation intensified. The reason that nobody warned America of deflation was due to false prosperity. The 1920’s were called “the Roaring Twenties”, while mainstream culture at this time supported that it was a time better than anytime before then there were many misconceptions with masses of people at this time (Facts). America was very dependent on production and 42% of people were impoverished. Poverty in 1920’s America was defined by making less than a certain amount of money each year, which was determined by the government (BBC).
And also, due to still ongoing ethno-religious conflicts in certain regions. People of many European countries are yet again in a conflict with their governments because of their dissatisfaction with new regulations related to tens of millions of refugees and asylum seekers, which leads to radical reduce in theirs already diminished life standards. Younger generations in Sweden live, in average, half of their life with their parents due to lack of housing, finances, and employment. Only very resourceful part of society is able to own an apartment or even a house. The “housing bubble” has not yet popped as it was expected long time ago.
Moreover, it also has negative impacts on social services. For example, it decreases the standard of transportation because of illegal immigrants who do not have the knowledge about the traffic rules and do not have driver’s licenses (Hook, 2002). It can increase mortality rate because of the accidences on the streets. Another fact is illegal immigrants cost U.S. governments about 1.4 billion a year on health cares (Wolf, 2008). It is a huge amount of money that U.S. has to put on illegal people instead of using it for developing the country, and it also cause lack of medical equipments and doctors because of a high number of patients.
Now a day, Thailand has an assortment of social problems which occurring every time, such as drug and family problem. The top problem Thai people encountered is poverty. They face assorted problems such as being poor, no economic stability and on debt. Those problems cause to unemployment, population growth, low economic growth rate and lost income in the country when compared with amount of population. Also, poverty problem still being causes criminality, lack of educational opportunities, treatment and mental health as well as being helpless country.
Both rich and poor have been affected and things like personal income, tax revenue, profits and prices have dramatically dropped. Jobs such as construction have been halted, farming communities suffered crop prices, and other areas such as mining took a most downturn. The depression was caused by a number of weaknesses of the economy. The lingering effects that took place from World War I caused numerous economic problems as Europe reported struggling to pay war debt and reparations. Another reported incident was a dramatic crash of the stock market in 1929, when about 16 million shares of stock quickly sold by panicking investors.
The increase in the cost of living has increased demand for better pay. So that, increasing the minimum wage and successive wages of people will ensure that people have the ability to cope with the rising cost of living. As the result, it will reduce the number of people who want to quit their job and also more contribute to
The long run aggregate supply (LRAS) curved is also decreased in read output from Y1 to YFE as well as a decrease in average price level in the economy. There is a big recessionary gap between Y1 and YFE. So what does exactly happen when there is a high unemployment rate? The country wants low rate of unemployment because high unemployment brings some costs in an economy. Firstly, those who are unemployed will not receive any wages, means they face money crisis.