Financial Crises and Recession in the Global Economy, Fourth Edition

Artificial intelligence-based public sector data analytics for economic crisis policymaking

“…One of the most serious weaknesses of market-based economies are the fluctuations of economic activity they repeatedly exhibit, which cause big problems to the economy and the society in general, so they have to be addressed by government through appropriate policies, aiming at avoiding them, if possible, and once they occur at reducing their intensities and durations and at mitigating their negative consequences for firms and citizens (Diebold and Rudebusch, 1999;Keeley and Love, 2010;Knoop, 2015;Allen, 2016). Economic crises can be defined as significant contractions of economic activity, which can be because of the "business cycles" (i.e.…”

“…The short-term consequences usually include reductions of the demand for most goods and services, resulting in serious decrease of firms' sales, production and profits, which leads to reductions of personnel employment (thus increasing unemployment and poverty) as well as materials' procurement (thus propagating the crisis from the sectors from which it started toward the sectors of their suppliers, etc., and finally to the whole of the economy, increasing the scale of the problem). Furthermore, during Public sector data analytics economic crises, firms usually reduce capital investment in production equipment, ICT, buildings, etc., and also in product, service and process innovations, which reduce the degree of renewal and improvement of their equipment, products, services and operations, as well as the exploitation of emerging new technologies, and these have serious medium-and long-term consequences on the efficiency and competitiveness of firms (Keeley and Love, 2010;Izsak et al, 2013;Knoop, 2015;Allen, 2016). Therefore, it is necessary that government agencies, especially the ones having competences and responsibilities for the economy and social welfare, to design and implement public policies for reducing these negative short-term as well as medium-and long-term consequences of the economic crises.…”

“…Our study makes a contribution toward the advancement of these two important and promising digital government trends and research domains: public sector data analytics (and especially policy analytics) and government exploitation of AI. It develops a policy-TG 14,4 oriented data analytics (policy analytics) AI-based methodology for supporting public policymaking concerning one of the most serious and large-scale problems that governments often face, the economic crises, which repeatedly occur with varying intensities in market economies, being an inevitable trait of them, and lead to contractions of economic activity, with quite negative consequences for the society, such as unemployment, poverty and social exclusion (Diebold and Rudebusch, 1999;Keeley and Love, 2010;Knoop, 2015;Allen, 2016) (see section 2.3). In particular, the research objective of our study is as follows: to develop a public sector data analytics methodology, which exploits existing data in both the public and the private sectors, concerning, on the one hand, firms' resilience to economic crisis (such as sales evolution because of crisis), and, on the other hand, characteristics of firms and their external environment, to identify characteristics of firms and their external environment that affect positively or negatively their resilience to economic crisis.…”

Using Government Data and Machine Learning for Predicting Firms’ Vulnerability to Economic Crisis

“…As mentioned in the Introduction one of the most serious problems of market-based economies are the economic recessions that repeatedly appear, which cause significant disruptions and problems to the economy and the society in general, and have to be addressed by government through effective public policies including appropriate interventions [2][3][4][5][6][7]. The economic crises have negative both short-term as well as mediumand long-term consequences for the economy and the society.…”

“…The COVID-19 pandemic is expected to lead to a severe recessionary economic crisis with quite negative consequences for large numbers of firms and citizens, as containment and social distancing policies adopted in most countries will on one hand 'flatten' the medical curve of virus spread (which is quite positive), but on the other hand will 'steepen' the resulting recession curve (which will have quite negative economic and social consequences) [1]. However, this is an 'old story': recessionary economic crises of various intensities and durations appear repeatedly in the last 100 years in market-based economies, and are recognized as one of the most severe and threatening weaknesses of them, having quite negative consequences for the whole economy and society [2][3][4][5][6][7]. The fluctuations that economic activity usually exhibits, and also some critical events, such as banking crises (like the one that gave rise to the 2008 Global Financial Crisis), epidemics (like the COVID-19 one), large increases in the prices of important goods (e.g.…”