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Shocks in sentence

1003 examples of Shocks in a sentence

As the sovereign-debt crisis has proven, the euro requires mechanisms to confront asymmetrical shocks, which implies the creation of a common treasury.
How much trouble will ultimately depend on factors that are very hard to forecast, including markets’ responses to Fed tightening and political shocks (say, the scandal enveloping Petrobras in Brazil) that shake investors’ faith in local policies and markets.
Moreover, energy and food price shocks can be both large and largely unpredictable, while the speed of price changes tends to increase with big shocks.
Economic shocks tend to exacerbate this political divide.
While each of these shocks may not qualify as the proverbial tipping point, the combination and the context are disconcerting, to say the least.
As a result, post-crisis economies are far more vulnerable to shocks and prone to relapses than might otherwise be the case.
Alas, there is an added complication that makes today’s shocks all the more vexing: governments and central banks have exhausted the traditional ammunition upon which they have long relied during times of economic duress.
The more meaningful message is how these shocks box the rest of us into an even tighter corner.
As Ravi Kanbur of Cornell University pointed out long ago, economists (and policymakers) tend to look at issues in the aggregate, to take a medium-term perspective, and to assume that markets work well enough to absorb a large part of adverse shocks.
In the aftermath of the Asian financial crisis of the late 1990’s, China amassed some $3.2 trillion in foreign-exchange reserves in order to insulate its system from external shocks.
They shield countries from frequent and unsettling volatility, be it economic, political, or social, and they reduce the risk of costly shocks.
Accordingly, for decades such institutions were widely viewed as the main feature differentiating advanced economies from developing countries that are still subject to a much larger array of damaging cyclical and structural shocks.
Unless they are defused in time, financial shocks may derail the economy from its normal growth path.
Of course, to some degree, a capitalist system will always be vulnerable to shocks and crises.
This more challenging scenario of anemic recovery undermines hopes for a V-shaped recovery, as low growth and deflationary pressures constrain earnings and profit margins, and as unemployment rates above 10% in most advanced economies cause financial shocks to re-emerge, owing to mounting losses for banks’ and financial institutions’ portfolios of loans and toxic assets.
Oil above $140 a barrel was the last straw – coming on top of the housing busts and financial shocks – for the global economy, as it represented a massive supply shock for the US, Europe, Japan, China and other net importers of oil.
And the costs of local financial shocks cannot be diversified away as easily.
Most of the Arab Awakening countries lack buffers to withstand further economic shocks.
But after so many shocks and so much technological change over the last decade, there is considerable uncertainty about how much unused capacity remains and where the non-accelerating inflation rate of unemployment (NAIRU) lies.
For the first time, an international agreement offers the least developed countries funds to cover some of the loss and damage caused by climate shocks.
That would not be the case if the eurozone operated according to Robert Mundell’s vision of an optimal currency area, with labor and capital adjustments replacing exchange-rate adjustment, and shocks being homogeneous (rather than asymmetric).
Most notably, eurozone countries have faced powerful asymmetric shocks, to which their lack of independent monetary-policy instruments made it virtually impossible to respond.
To surmount the associated political hurdles, eurozone leaders must create a limited “fiscal capacity,” which should act as a “common but limited shock-absorption function” that would “contribute to cushioning the impact of country-specific shocks and help to prevent contagion across the euro area and beyond.”
Tax transfers should also act as an automatic stabilizer in the case of asymmetric shocks.
After all, the country has endured serious internal and external shocks almost every decade over the last 40 years: the Cultural Revolution in the 1970s; high domestic inflation in the 1980s; the Asian financial crisis of the 1990s; and the 2008 global financial crisis.
My preference is to assume that shocks arrive relatively frequently, but that they vary in size and probability.
A sensible approach could be to hedge against intermediate-level shocks.
That might also help mitigate the impact of larger shocks and increase the net return potential during severe shocks (though it might also lower the return potential for more mild shocks).
The focus has been appropriately on the cash-flow challenges that come from a combination of large illiquid investment portfolios and large systemic shocks that cause adverse shifts in the cash flow models.
European experience suggests that large-scale systemic shocks call for greater financial support.
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