Cyclical Economic Change Flashcards
What is a boom
A period of economic growth in a capitalist economy when jobs are plentiful, incomes increase and returns on investments are high. It bring associated opportunities and positive impacts
What is a bust
A period of economic shrinking where jobs are lost (unemployment rises) and incomes fall, investors loose money. Often follows a boom. Brings negative impacts
What can happen as a result of a bust
Recessions or depressions
Economic impacts of a boom
new investment, creation of job opportunities,
reduced unemployment, increased household
income
Social impacts of a boom
include raising standards of living, lifting
people out of poverty, increased household
spending on housing, health, education, leisure,
luxury items
Economic impacts of a recession (bust)
higher unemployment, reduced household / disposable
income, lack of government spending, lack of investment
Social impacts of a recession
cuts in household spending on recreation, health, education, housing / rent; falling standard of living
Linked to increased suicide rates and poor health
Impacts of recession on governments
decreased spending on social services such as decisions to spend on health, education, housing
Drops in benefits and subsidies - unequal impact
Impact of recession and health
strong link between unemployment and health,
especially mental health, during periods of
recession and afterwards - suicide increases
Physical health also worse - less spending on NHS in UK - 2008
Impact on inequalities
Recessions worsen inequalities - low income
households less able to withstand periods of
unemployment / reduced income than wealthier
households
Booms can reduce inequalities as poorer groups regain jobs and income increases - many benefits felt in richest groups - bankers bonuses etc.
What was the peak unemployment after the 2008 financial crisis
10% in October 2009
LT impacts of busts?
Impacts of busts are often delayed - unemployment increases after worst of bust as it is a knock-on impact, therefore impacts from unemployment felt long after the bust.
Often unemployment from busts in low skilled areas can create long term unemployment + reliance on benefits
Spatial inequality of cyclical change
recession can cause structural unemployment leading to
service decline in particular areas - North
Unemployment in South West much lower due to service jobs - last to go
