7 Examples of Economic Problems
John Spacey, updated on January 15, 2023
Economic problems are turbulent periods on the way to economic and national development that can last for years, decades or longer. They come in several distinct varieties:
DeflationA sustained decrease in the price of goods and services. Viewed as problematic because it discourages productive investment.
StagflationStagflation is a period of high inflation, low economic growth and high unemployment. In theory, it should be rare because inflation is usually driven by economic growth. Stagflation typically results from severe economic mismanagement or over-reliance on a single commodity.
HyperinflationA period of rapid and accelerating price increases that cause normal economic functions to break down. Often results in abandonment of a currency.
Speculative BubblesAsset prices such as stocks, real estate or commodities that rise far beyond intrinsic value eventually resulting in a crash that impacts an economy.
Economic DepressionA severe long term downturn in economic activity that typically causes bankruptcies, high unemployment, reduced production, credit contraction, deflation, financial crises and bank failures. Has a severe impact on quality of life, health and the development of nations and communities.
Uneconomic GrowthEconomic activity that shows up in GDP that is destructive or unproductive in nature.
Tragedy Of The CommonsAn economic system that fails to account for damage to shared resources, resulting in perverse incentives and destruction of resources.
Economic ProblemsThis is the complete list of articles we have written about economic problems.
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