By: Pablo Luis Nemiña
The term economic crisis describes a situation of marked deterioration in the main economic variables that remains for a prolonged period. To identify an economic situation as a crisis, three factors must coexist: (1) the economy faces severe problems; (2) widespread deterioration affects the entire economy and is reflected in most variables, such as gross domestic product growth rate, level of employment, level of consumption and/or investment, inflation rate, and interest rates, among others; and (3) this situation is not temporary but extends for a period longer than, at least, one semester.
The economy distinguishes three degrees of deterioration of economic conditions depending on its intensity: first, a depression, which occurs when the growth rate undergoes a substantial reduction but maintains a positive sign, for example, ...
Nemiña, P. (2015). Economic crisis. In F. Wherry, & J. Schor (Eds.), The SAGE encyclopedia of economics and society (Vol. 1, pp. 603-604). SAGE Publications, Inc., https://www.doi.org/10.4135/9781452206905.n241