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Radu Isaic ()
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Radu Isaic: Bucharest University of Economic Studies

Romanian Economic Business Review, 2020, vol. 15, issue 4, 69-80

Abstract: How do we define a crisis? Etymologically the word comes from the Greek and means: to decide, turning point. The crisis is the moment of truth, a line between the past and the present. The failure caused by the crisis makes the world, in two successive moments of time, no longer look alike. During the crisis, the changes are wide and deep. But there are difficult aspects of a scientific and empirical nature in: delimiting the duration of the crisis; in determining the economic aspects that are considered important and whose qualitative and quantitative evolution must be followed; and to determine the frequency of occurrence of these turning points so that the changes are not too superficial or an effect of gradual evolution. The moment of truth is a challenge. It creates a tension that requires adaptation, the old problem-solving techniques become useless. If new adaptation techniques are innovated and emerging, the crisis is over. But the line between success and failure is gray. Success can only be temporary and the crisis reappears. There are various ways in the literature to define a crisis depending on: frequency of occurrence, duration, magnitude, depth and impact. Some economists study rare and large-scale crises, other economists study frequent and small-scale crises. Most crises are the culmination of gradual changes. Tensions accumulate over long periods; they gain critical mass and are observed at that moment, followed by the reaction of decision makers and ordinary individuals to the pressures that gave the pot to boil. We will use the narrative argument in the article. A crisis is usually identified by the values of GDP over the next two quarters. Is the GDP indicator correct for tracking crises? It can be artificially increased through consumer loans. Are the values that this indicator takes for two quarters enough to characterize a crisis? In China, the symbol for crisis means: danger + opportunity.

Keywords: economic crises; economic cycles; empiricism; apriorism; hypothesis (search for similar items in EconPapers)
Date: 2020
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Handle: RePEc:rau:journl:v:15:y:2020:i:4:p:69-80