Transition of Crisis from Stimulator of Economic Development into a Source of Social Problems

Abstract

Purpose

The purpose of the chapter is to determine social consequences of crises of economic systems and to evaluate the risks of transition of economic crisis from a stimulator of economic development into source of social problems and, in particular, into social crisis.

Methodology

The authors use the methods of horizontal and trend analysis, as well as the method of regression analysis for determining the dependence of the index of happiness, calculated by the New Economic Foundation, on the growth rate of GDP in current prices according to the International Monetary Fund (IMF). In addition to this, regression analysis of dependence of unemployment rate according to the IMF on the index of economy digitization, calculated by Cisco, in 2018 is determined. The objects of the research are the leading developed countries (G7) according to the classification of the IMF and countries of BRICS (as representatives of developing countries).

Conclusions

As a result of the research, it is determined that traditionally studied indirect indicator of social consequences of innovational development of economy after the 2008 crisis – unemployment rate – is not very informative and is less studied; the index of happiness – which describes public moods with high precision – showed reverse dependence on growth of GDP in constant prices and on digitization of economy. The example of the 2008 crisis showed that developed and developing countries had new social problems in the period of post-crisis restoration of economy; these problems became more clearly expressed than in the period of decline. In the mid-term (by 2020–2025), crisis might transform from stimulator of economic development into a source of social problems.

Originality/value

The obtained results emphasize priority of sustainability of development of economic systems in the economic and social aspects.

Citation

Kurilova, A.A., Zinovyeva, O.G., Popova, L.V. and Shaldokhina, S.Y. (2019), "Transition of Crisis from Stimulator of Economic Development into a Source of Social Problems", Popkova, E.G. (Ed.) “Conflict-Free” Socio-Economic Systems, Emerald Publishing Limited, Leeds, pp. 173-180. https://doi.org/10.1108/978-1-78769-993-920191020