Economic collapse

As a structural crisis economic situation is referred to the long term suffering in virtually all businesses of a single market, a sector or an entire economic sector under production or supply overcapacity. A structural crisis can a particular focus on a particular region, but also accept general government or even global economic proportions.

The main feature of a structural crisis is the long-term ( structural ) demand. A sustainable difference between demand and supply can have several causes:

• Construction and maintenance require -border production capacity,
• Productivity gains through technological progress, eg by introducing new technologies and progressive automation
• Altered consumer behavior
• Changed investment behavior of the economy or the state
• Superior substitution competition, eg through new products or cheap imports

Necessary structural adjustments create greater scope in the event of a crisis positive feedback, especially on the labor market. The result is additional unemployment, which aggravated the crisis situation and it can spread to other companies, industries or major sectors of the economy if necessary. As part of the social market economy, it is therefore one of the most important tasks of the state, to make the economic conditions by means of economic, financial and social policy, in general, structural policies so that not cause such structural adjustments to mass unemployment.

In wirtschaftsgeografischer respects structural crises often go out of mono structures and lead to economic and social problems of entire regions, where the economy was geared exclusively or predominantly to certain monocultures or individual industries. Examples are the coal crisis and the steel crisis in the seventies, which cost the Ruhr many jobs, and it led to a structural crisis continues to this day. This phenomenon occurs in many old industrial areas. In addition to the Ruhr area which is, for example, in the north of England or in the Manufacturing Belt in the United States the case. The way out of the structural crisis is structural change.