Economic depression

Economic depressions may also be characterized by their length or duration, showing increases in unemployment, larger increases in unemployment or even abnormally large levels of unemployment (as with for example some problems in Japan in incorporating digital economy,[1] that such technological difficulty resulting in very large unemployment rates or lack of good social balance in employment among population, lesser revenues for businesses, or other economic difficulties, with having signs of financial crisis, that may also reflect on the work of banks, or may result in banking crisis (in various ways that may be for example unauthorized transformations of banks), and further the crisis in investment and credit; that further could reflect on innovation and new businesses investments lessening or even shrinking, or buyers dry up in recession and suppliers cut back on production and investment in technology, in financial crisis that may be more country defaults or debt problems, and further in feared businesses bankruptcies, and overall business slowdown.

In the United States the National Bureau of Economic Research determines contractions and expansions in the business cycle, but does not declare depressions.

[2] Generally, periods labeled depressions are marked by a substantial and sustained shortfall of the ability to purchase goods relative to the amount that could be produced using current resources and technology (potential output).

[9] To some degree, this is simply a stylistic change, similar to the decline in the use of "panic" to refer to financial crises, but it does also reflect that the economic cycle – both in the United States and in most OECD countries – though not in all – has been more moderate since 1945.

[citation needed] The Ming Empire of China went bankrupt and the Stuart Monarchy fought a civil war on three fronts in Ireland, Scotland, and England.

Thomas Hobbes, an English philosopher, created the first recorded explanation of the need for a universal Social Contract in his 1651 book Leviathan based on the general misery within society during this period.

[citation needed] A long-term effect of the Great Depression was the departure of every major currency from the gold standard, although the initial impetus for this was World War II (see Bretton Woods Accord).

[14] Greece's high amounts of sovereign debt precipitated the crisis, and the poor performance of its economy after the introduction of severe austerity measures slowed the entire eurozone's recovery.

The economic crisis in the 1990s that struck former members of the Soviet Union was almost twice as intense as the Great Depression in the countries of Western Europe and the United States in the 1930s.

[15][16][17] Average standards of living registered a catastrophic fall in the early 1990s in many parts of the former Eastern Bloc, most notably in post-Soviet states.

However, the depression was multicausal, with its severity compounded by a coincidence of multiple sudden external shocks, including loss of Soviet trade, the savings and loan crisis and early 1990s recession in the West, with the internal overheating that had been brewing throughout the 1980s.

The depression had lasting effects: the Finnish markka was floated and was eventually replaced by the euro in 1999, ending decades of government control of the economy, but also high, persistent unemployment.

[citation needed] The late 1910s and early 1920s were marked by an economic depression that unraveled in particularly catastrophic circumstances: World War I and its aftermath led to a global nosedive in commodities that ruined many developing nations, while servicemen returning from the trenches found themselves with high unemployment as businesses failed, unable to transition into a peacetime economy.

The savings & loans and the leveraged buyout crises led to a severe depression in mid-to-late 1989, causing a recession in 1990–91 (also fueled by the oil price crisis), whose effects lasted as late as 1994.

This downturn is more remembered for its political effects: British Prime Minister Margaret Thatcher had to resign in November 1990; and while his approval ratings were above 60%, U.S. President George H. W. Bush lost the 1992 election to Bill Clinton because of the domestic malady marked by the depression and increasing urban decay.