A strange combination, but as you will see a lot of similarity between this humble process equipment and world economy. For illiterates in chemical engineering, this a piece of equipment widely used across chemical industries for solid-liquid separation.
Following is the layman description of the equipment in Wikipedia:
Cyclonic separation is a method of removing particulates from an air, gas or water stream, without the use of filters, through vortex separation. Rotational effects and gravity are used to separate mixtures of solids and fluids.
A high speed rotating (air)flow is established within a cylindrical or conical container called a cyclone. Air flows in a spiral pattern, beginning at the top (wide end) of the cyclone and ending at the bottom (narrow) end before exiting the cyclone in a straight stream through the center of the cyclone and out the top. Larger (denser) particles in the rotating stream have too much inertia to follow the tight curve of the stream and strike the outside wall, falling then to the bottom of the cyclone where they can be removed. In a conical system, as the rotating flow moves towards the narrow end of the cyclone the rotational radius of the stream is reduced, separating smaller and smaller particles. The cyclone geometry, together with flow rate, defines the cut point of the cyclone. This is the size of particle that will be removed from the stream with a 50% efficiency. Particles larger than the cut point will be removed with a greater efficiency, and smaller particles with a lower efficiency.
In nutshell, mixture is circulated inside the equipment. The lighter component due to helical circulation, keeps rising, where as the heavier particle hit the wall and as a result loose energy, resulting in its fall to bottom of equipment. So “Rising due to circulation” is the main physics behind the humble piece of equipment. The moment circulation gets affected due to some reason, inefficiency creeps into the system.
Now lets correlate this phenomenon with last financial crisis. Now before the crisis, lot of money was circulating within the society across borders and oceans. So a result of which there was always some money with some one, for all the time, albeit some more (so were called rich) and some less (so were called poor). But circulation of money in the economy ensured money in each palm. Circulation led to further circulation and so the whole economy was rising due to this circulation, exactly copying the phenomenon happening in Cyclone separator as explained above.
Now when one of the prestigious company Lehmann Brothers got bankrupt, the sentiments was what was hurt most. Trust was gone for a toss and confidence for a six. Now banks decreased the loans disbursed (I am not showing figures, since all well known), lenders zipped their cash rich bags. And as a result the flow of money was stalled. The circulation stopped. And so money stayed where it was. As a result poor people and small & medium companies starved. This resulted in further stopping of what little circulation and this led to further stopping and whole economy start falling at a time, exactly replicating the cause of failure of Cyclone separator.
So, as we can see that not only the well functioning of world economy and cyclone separator, but also the cause of their failure, have same physics behind them. Continuous circulation results in rise and the moment circulation stops, everything falls together. Interestingly, even the remedy to bring back system is also same. Cyclone separator is brought back to equilibrium of operation by restoring proper circulation, by means of re-start of motor (that causes circulation) and so in world economy, where government pumped in money (called Stimulation money), so that re-circulation is encouraged and re-started. No wonder, why economists n government encourages spending? Because they realize its circulation of money that is more important than pumping in money from outside.
So as we stand now, money flow re-circulation has started and so economies across the world have started growing together. And it will grow together, till circulation is happening. The moment it stops, we will have another recession. And being a chemical engineer, I know cyclone separator does fail and it needs periodic maintenance. So World economy will go through more of recessions and these recession will bring in more reset or the way business is done. So 2009 recession was not the first and also will not be the last recession. What I don’t know is when next recession is going to happen. So I am going back to my chemical engineering books, to study cyclone separator more, about its maintenance cycle, so as to predict next recession. As for now, enjoy the twist n turns of ROTATION, REVOLUTION & CIRCULATION of money.