The paper "How Is the Financial Crisis Affecting the Current Economy? " is an engrossing example of coursework on macro and microeconomics. After a long span of economic expansion that began in the mid-nineties, the Spanish economy began to show the first signs of exhaustion in 2006. The international financial crisis that began in the year 2007 and deepening in 2008 hastened the end of the expansion cycle while triggering severe readjustments of the imbalances that had accumulated over decades. The severe effects of the financial crisis in Spain have taken a lot of time to correct since they drastically affected the economy in different ways.
The banking sector, the housing sector, and the debt situation are among the sectors that were highly affected by the crisis. This paper aims to analyses the effects of the financial crisis on the debt position of Spain, the employment sector, and the banking sector of the economy to date. It describes effects to the banking sector to date like an increase in financing costs, premiums, reduction in credit, failure of banks to perform basic functions among other effects.
It will describe how the debt situation was drastically affected by the beginning of the crisis onwards. It will also discuss the effects of the crisis on the employment sector by looking at the increase in unemployment rates over time. Effects of the financial crisis to the employment sector The author argues in a well-organized manner that the financial crisis drastically increased the unemployment rate in Spain. Available statistical data is very alarming. The unemployment rate in Spain rose from the initial rate of 8.3% (1,834,000) in 2007 to 20.1% (4,632,000) in early 2011.
There was high job destruction in 2008 and 2009. The failure of the economy to peak earlier made it hard to create more jobs and this made the unemployment rate to remain high. Between these periods there was an 11.8% increase in the unemployment rate compared to the eurozone of increase from 7.5% to 10.1% that represented a 2.6 percentage increase.
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