Behavioral principles of Crisis Development in Modern Global Economy

Abstract

The article is aimed at revealing the possibilities of the behavioral economics theory to provide satisfactory scientific explanation of the causes of crises appearing amidst growing uncertainty of modern economic development in the global economic environment, and to suggest ways to overcome them. The 2007–2008 global financial crisis and the 2019–2021coronavirus pandemic are used as an example of such crises. Observation, the unity of quantitative and qualitative analysis, expert evaluation, logical modeling, analysis and synthesis were used as the methods of the research. Based on the author's understanding of the sweeping reasons for the global financial crisis, conclusion is made that one of the key ways of preventing its recurrence in the future is taking comprehensive educational measures to improve people’s financial literacy, e.g. modification of the state standards of secondary and higher education (compulsory formation of the corresponding general economic and financial competence of education seekers at certain education levels, regardless the educational program specialization). Having analyzed the impact of the coronavirus pandemic on socio-economic stability in individual countries and in the world as a whole, the authors have made two generalizations. First, the economic consequences of a pandemic at the initial stage of its development significantly depend on the awareness of its danger at the level of national consciousness. Secondly, the minimization of the negative socio-economic consequences of a pandemic should mainly lie within the responsibility of the state. Promising areas for further research on this issue are the following: a) the search for opportunities to develop a system of indicators showing the civil servant’s professionalism and their ability to work efficiently in current complex environment; b) the assessment of damage made by incompetent and unprofessional leadership in a particular area of public life; c) the analysis of mechanisms of spreading irrational economic and social behavior at the micro- and macro-levels, taking into account the national character peculiarities

Keywords

• global financial crisis
• coronavirus pandemic
• behavioral economics