Effects of economic crisis on standards of living are affecting the overall growth of nations globally. There are several effects of economic crisis that diminish the living standard of people. The economic crisis and recession is a significant impact on the well-being of certain segments of the population. The national research council shows that the issue affects the older people in the united states. Thus, international experience indicates that severe financial crisis affects the standards of living of people. Moreover, markets and business enterprises are not recovering at an equal pace. Additionally, declines in housing and equity price in the aftermath of a financial crisis is long-living. Consequently, there is poor economic growth brewing as a result of the crisis.
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THE SOCIAL EFFECTS OF ECONOMIC CRISIS
From 2008 through 2009, the world has been suffering from the worst financial crisis. The diverse effects of economic crisis extend to all parts of the world. The rapid global economic downtown is severely disrupting economic growth worldwide. Moreover, it is causing significant setbacks in progress towards achieving the millennium development goals. In addition, increasing unemployment, loss of income and increased vulnerability is among the social impacts of the crisis. Consequently, the rise of poor standards of living is emerging at an alarming rate. However, during times of financial and economic crisis, households often adopt coping strategies such as reducing expenditure. Therefore, as challenging as it is, the crisis is contributing to poor economic growth. However, the crisis offers an opportunity for achieving social progress by making universal social protection.
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IMPACT OF POOR ECONOMIC GROWTH ON LIVING STANDARDS
Economic growth is the most powerful instrument for reducing poverty and improving the quality of life in developing countries. However, effects of economic crisis can also result in poor living standards. As poverty increases, the impact of inequality on economic growth becomes negative and statistically significant. Empirically, a negative relationship between income inequality an economic growth robust to the inclusion of poverty. Therefore, the non-progressing economy gives way to poor standards of living. However, even though economic growth may be staggering, there is also better lifestyles associating with positive growth of living standards. Poverty alleviation policies, even if they do not reduce inequality, may promote economic growth. Consequently, governments work to eradicate poor economic growth and combat rising poverty.
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