The international financial crisis is usually created because of the speculative attacks and these crises are also classified as balance of payments or they are known as currency crisis. In the similar manner there are certain other disruptions that are created by the exchange rate of a country and in certain scenarios when countries fails to pay off their debt it is known as the crisis that occur due to sovereign debt (Horowitz 2001).
Wider economic crises
These crises are usually categorized in the phases of recession and this recession tarnish the entire growth of the economy. In certain scenarios when recession creeps into the economy and its tenure is prolonged then it is known as a depression. However, there are certain other scenarios that are attached with this economic depression like economic stagnation, etc. The spending of consumers is declined and consumers are less likely to purchase luxury items. That is the reason why there are certain economists and strategists that believes that economic crisis are usually initiated because of recession.
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