Some reflections on crisis, risk, and uncertainty

Abstract

The economic history of the world and the history of universal economic thought provide evidence that economic crises are an inherent component of the market economy. After the year 1550, crisis phenomena appeared every 6.4 years on the average. The term “crisis” was coined by Hippocrates in ancient times, while “economic crisis” was introduced into specialist language by J.C.L.S. de Sismondi in 1827. In turn, in 1725, R. Cantillon enriched the economic vocabulary by the concept of “risk” and “uncertainty”. Taking them into account, he contributed to the development of economic sciences and their approximation to the real economy. Precise and unambiguous definitions of risk and uncertainty are credited to F.H. Knight and J.M. Keynes.

Keywords

• crisis, economic crisis, depression, recession, risk, uncertainty, probability