FACTORS EFFECTING ECONOMIC CRISES– A CASE STUDY OF SRI-LANKA
Keywords:
Economic Crises, Financial Markets, Gross Domestic Product (GDP), Economic Decisions, Sri-LankaAbstract
Any financial crisis has brought with it an economic recession which is more severe and widespread than any decline in production to the level of any past years’ production, may affect the production to 50 years’ low (its depends on the gravity of situation and differs country to country). In simple words, economic growth is the increase in the inflation-adjusted market value of the goods and services produced by an economy over time. It is measured as the percent rate of increase in real gross domestic product (GDP), usually in per capita terms. This paper aims to identify the factors affecting economic crisis using case study of Sri–Lanka. The roots cause of the crisis is not only to be found in the financial sector but also in macro-economic imbalances, in regulation failures and insufficient policy coordination. Previous experience shows that the length of the crisis will be different for the financial markets, for the housing sector, for production and for employment, and that recovery could be slow, bumpy, fragile and many times take sudden U-turn. This study helps to find out the factors contributing to external debt and economic crises and required financial policies. This study is useful for understand root cause of the worsen situation and ways to manage external debt.
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