An economic recession is an example of which type of crisis?

An economic recession is considered a systemic crisis because it affects the overall functioning of the economy and involves disruptions across various sectors. A systemic crisis implies that the issues are interconnected and can lead to significant instability within financial markets, labor markets, and beyond, impacting both consumers and businesses at a broad level. During a recession, multiple systems within an economy fail to perform optimally, leading to widespread consequences such as rising unemployment, declining consumer confidence, and contraction in economic activity. This type of crisis reflects the fundamental weaknesses within the economy's structure rather than being limited to isolated factors or individual organizations.

While aspects like system-wide financial issues or global impacts might arise during a recession, the defining characteristic is that it disrupts the foundational economic systems, which aligns closely with the concept of a systemic crisis.