I'm not sure if this is a silly question or overly semantic but I think the term "Crisis" is misunderstood (or at least misunderstood by myself). There are a number of ways the term is used, namely:
These are all different scenarios but all have the word "crisis" attached to them.
Is there a unifying definition of what constitutes a economic crisis?
I don’t think crisis itself has set definition as opposed to recession, unless you attach some clarifier to it as the examples you mention. Generally the word is even in academic work thrown around quite loosely.
For example in Romer advanced macroeconomics in the subject index for word crisis you will find:
crisis; see debt crisis; economic crisis of 2008-; recessions
Hence the word crisis is at least in macroeconomics used very loosely. However, when it comes to for example debt crisis or financial crisis you get more precise definition.
For example consider these definitions of the terms you mentioned (excluding health crisis since for that I think we have to go outside economics and also you tagged it with macro so I will focus on that) by leading authors:
Financial Crisis: according to the Mishkin and Eakins popular textbook financial markets and institutions a financial crisis is defined as “a major disruption in financial markets, characterized by sharp declines in asset prices and failures of many financial and non financial firms”.
Debt Crisis: which is also used as a synonym for fiscal crisis in Romer advanced macroeconomics it is argued that debt/fiscal crisis is a situation that involves “a sharp contraction in fiscal policy, a large decline in aggregate demand, major repercussions in capital and foreign-exchange markets, and perhaps a default on foreign debt.”
To further add to the confusion many authors have their own slightly different definitions of debt crisis. For example Reinhart and Rogoff in their now infamous research on debt crises define two kinds of debt crises external debt crisis defined as debt crisis that “involve outright default on a government’s external debt obligations—that is, a default on a payment to creditors of a loan issued under another country’s jurisdiction, typically (but not always) denominated in a foreign currency, and typically” and internal debt crisis defined as default that do not involve powerful external creditors.
If we look at the meaning of crisis as recession we find that they are defined as a drop in economic output. For example according to Blanchard et al macroeconomics an European perspective a recession is “a period of negative GDP growth. Usually refers to at least two consecutive quarters of negative GDP growth.”
Hence I don’t think there is any precise definition of crisis in macroeconomics and I would say in economics in general. A crisis is just used as an umbrella term for times of economic distress or fall in economic activity. Sometimes even within the field some authors might have different definitions.
I agree with @1muflon1 that there is no precise or unifying definition of what constitutes an economic crisis. However, do we need one?
First, we can adopt a definition of the term crisis, such as "a situation that has reached a critical phase" according to the Merriam-Webester online dictionary.
Next, we can attach an adjective to the crisis to characterize different types of situations that have reached a critical phase such as a financial crisis, a sovereign debt crisis, etc.
Finally, let me add to the confusion by giving another definition of the financial crisis from the Deardorffs' Glossary of International Economics:
- A loss of confidence in a country's currency or other financial assets causing international investors to withdraw their funds from the country.
- A loss of confidence in banks and other financial institutions leading to failures of those instituions and drying up of credit.
I also think it's very semantical, but basically goes down to the common understanding, that crisis can be any major adverse effect which has an impact on a larger group of people (eg. a nation).
Given we accept this, all those terms can be interpreted within their own context.
I think you are taking a philosophical approach to the question. This is a time of crisis for people suffering in some sort of way. COVID created a crisis for some people and this crisis created opportunity for some people. This has been time that I have been able to use learning to program and monetize off of my projects. I think the crisis is relative to who and what are involved. I hope I am not breaking rules here, but it seems to fit the question. Just possibly moved to a different community or something.
