What is contagion with respect to economics?

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pohnpei397 eNotes educator| Certified Educator

I think that you are asking about "contagion" and I have changed your question to reflect that.  If that was not the right word, please let us know.

In economic terms, contagion is what happens when negative economic events in one country "infect" other countries.  This is why it is called "contagion."  It is like a contagious disease spreading from one country to another.  An example of contagion can be seen in the problems that the EU is having right now.  It all started with problems in the Greek economy.  But those problems spread to other countries and before too long those other countries (like Ireland and Portugal) were having their own problems and the problems are threatening to spread even further.

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