Crisis andUnemployment by Serdar Bayraktaro ğ lu
Basic DefinitionsWhat is a Crisis?A Crisis is an event that can destroy or affect an entireorganization. Characteristics of A Crisis Little time in which to act or 1 respond 2 Missing or uncertain information 3 A threat to resources or people.
Basic DefinitionsWhat is An Economic Crisis?An economic crisis refers to a period in which undesignedand imponderable progress causes to negative macro - andmicroeconomic consequences.
Types of Economic Crises 1 Banking crises 2 Speculative bubbles and crashes 3 International financial crises 4 Wider economic crises
Types of Economic Crises 1 Banking crisesBanking crisis is a type of financial crises in which a largenumber of panicky customers try to withdraw their fundsfrom the bank they believe may fail.
Types of Economic Crises 2 Speculative bubbles and crashesWhat is a bubble ? An economic bubble is “trading with high prices that areconsiderably at variance with intrinsic values. Bubbles generally have a negative impact on the economybecause they tend to cause misallocation of resources intonon-optimal uses. In addition, the crash which usually followsan economic bubble can destroy a large amount of wealthand cause negatively economic circumstances.
Types of Economic Crises 3 International financial crisesWhen a country that maintains a fixed exchange rate issuddenly forced to devalue its currency because of aspeculative attack, this is called a currency crisis or balance ofpayments crisis.
Types of Economic Crises 4 Wider economic crisesRecession & Depression What is a recession ? A downturn in economic growth lasting several quarters or more is usually called a recession What is a depression ? An especially prolonged recession may be called a depression.
Causes of Economic Crises Inactive Monetary Management Incapable Auditing Disordered Balance Sheets Inactive Financial Management Inactive Leadership Organizational Structure Breakdown in Production & Services Coordination Failure Organizational Unplanned Management Extreme Growth CausesManagement Without Vision Hierarchy Lack of Communication Centralism Liquidity Problems Shortfall of cash Receivable collecting problems
Causes of Economic Crises Ecologic Changes and Natural Disasters Flooding Earthquake Economic changes Climatic irregularity Hyperinflation Deregulation Technologic Changes Intensive Competition Biotechnology Localization NonCommunication Technology Organizational Demand Downturn Causes Information Technology Supply Downturn Inventions Globalization Economic Liberalization Political Changes Increasing Tax Rates Military Coup Depression Governmental Crisis Political Unstability
Consequences ofEconomic Crises Effects of Economic Crisis : Unemployment and Income Loss ( mass impacts ) overcome the turbulence with the least effect text
Crises The Great Depression was a worldwide economic depression originated in the United States and started in1929 most countries in 1929 and continued till 1930s or earlyCrisis 1940s for different countries. It was the largest and most important economic crisis in history, and is used as an example of how far the worlds economy can fall.
Crises The Turkish economy remained an inward-oriented closed economy until the government launched an economic reform and stabilization program on 80s to liberalize the Turkish economy. The stabilization program1994 has a favorable impact on the Turkish economy,Crisis transforming it into an export-oriented, private-sector- driven economy. as the economy flourished, however, increasing political competition forced the government to compromise the stabilization program and pursue fiscally damaging populist economic policies, which resulted in an economic crisis in the beginning of 1994.
Crises The government responded to the economic crisis by launching an IMF backed economic stabilization program. As the economy recovered and economic stability improved, the government delayed continued implementation of the structural measures of the1994 stabilization program, which resulted in the furtherCrisis deterioration of the Turkish economy until the worsening fiscal situation eventually culminated in another major economic crisis in 2001.
Crises 1997 asian crisis was a period of financial crisis which has started in july 1997 in thailand with the financial collapse1997 of the Thai baht through the decision of the governmentCrisis to float money to devaluate the national currency.
Crises The 2001 crisis of Turkey preceded by a financial turmoil that burst in the second half of November 2000 just at the midst of an exchange rate based stabilization program. As of the end of December 2000, the average interest rates were almost four times higher than their levels at the beginning of November2001 and more than five times higher than the pre-announcedCrisis year-end depreciation rate of the lira. This unsustainable situation ended on the February 19, 2001, when the prime minister announced that there was a severe political crisis. Three days later, the exchange rate system collapsed and Turkey declared that it was going to implement a floating exchange rate system.
Crises The global financial crisis of 2008 became in september 08 visible. With the bursting of U.S. Housing bubble the mortgage crisis has occured. Consequent failures of U.S. and European investment banks, insurance firms and mortgage banks it rapidly evolved into a global crisis resulting in a number of European bank failures and2008 declines in various stock indexes, and large reductions inCrisis the market value of equities and commodities worldwide. The crisis has led to a liquidity problem and the de-leveraging of financial institutions especially in the United States and Europe, which further accelerated the liquidity crisis.
PrecautionsMacroGenerally macroeconomic unstabilities lie behind economic crises. In that case the priority is to reestablish the macroeconomicstability. Political stability is the way to provide macroeconomicstability. Structural reforms about regulations, fiscal discipline,trust and stability must be legislated by all means. Monetary discipline is important. Government obligations have toBe constitutional just like it is in European Union. ( MaastrichtTreaty) Public borrowings rate should have strict discipline thanksto the constitutional obligations. Tax System should be reorderedconsidering principles of equity, justice, stability and efficiency.Diminishing pressure of taxes and reducing untaxed economywould be helpful.
Precautions MicroAlthough macroeconomic precautions are a necessary for the economic stability microeconomic regulations are also required to cure economic crises. Effective applying of Total QualityManagement as the modern management mentality,Effective applying of innovative management technics in organizationsGetting high quality, low costs, speed and effective services andrestructuring thanks to the reengineering process
Effects of CrisesThe biggest effect of crises is 1929 USA 1994 Turkey 2008 USA Unemployment 1997 ASIA 2001 Turkey
Historical Events USA 1929 USA 2008The Great Depression ASIAA worlwide economic 1997 Global Financialdownturn TURKEY Crises 2001 Spread of the U.S. Subprime TURKEY Asian Financial Crisis Mortgage Crises Develuations and Banking 1994 Crises across Asia 2003.10 Add Your Text 2003.10 Add 2002.10 Add Your Text Your Text 2002.10 Add Your Text 2003.10 Add 2002.10 Add Your Text Your Text