Shock (economics) 982802 225415890 2008-07-13T15:53:43Z NJGW 6012605 Klien's responce to Friedman In [[economics]] a '''shock''' is an unexpected or unpredictable event that affects an economy, either positively or negatively. Resiliance to such events depends on general [[preparedness]], [[economic policy]], existing [[infrastructure]] and effective [[emergency management]] planning. The use of [[floating exchange rate]]s has been promoted as a way to dampen the effects of economic shocks. [[Milton Friedman]], a prominent economist, has argued that financial shocks are routine and that government actions may hinder recovery through poor [[fiscal policy]]. [[Naomi Klien]], in her book [[The Shock Doctrine]], argues that the shocks Friedman refers to are enacted during times of widespread social duress, allowing political groups to initiate what would otherwise be unpopular policies (such as [[Augustus Pinochet]]'s [[1973 Chilean coup d'état|rise to power]] and rule in Chile, the creation of the [[Patriot Act]] after [[September 11, 2001 attacks|the September 11 attacks]], or the rise to power of [[Iraqi insurgency|insurgents in Iraq]] during the 2003 [[Iraq War]]). ==Types== If the [[shock]] is due to constrained supply it is called a [[supply shock]] and usually results in price increases for a particular product. A [[technology shock]] is the kind resulting from a technological development that affects [[productivity]]. Shocks can also be produced when [[accident]]s or [[disaster]]s occur. The [[2008 Western Australian gas crisis]] resulting from a pipeline explosion at [[Varanus Island]] is one example. ==See also== {{portal|Economics}} *[[Oil crisis]] *[[Shock therapy (economics)|Shock therapy]] *[[Social risk management]] *[[The Shock Doctrine]] ==References== {{reflist}} {{Unreferenced|date=July 2008}} [[Category:Economics terminology]] [[Category:Information, knowledge, and uncertainty]] {{econ-stub}} [[de:Schock (Volkswirtschaftslehre)]]