Recession

From Conservapedia

Jump to: navigation, search

A recession implies at least two quarters of negative economic activity. [1] It is a increase in an economy's unemployment; output and profits fall; personal income falls.

Broader definitions of an economic recession are often used. Investopedia defines an economic recession: "A significant decline in activity across the economy, lasting longer than a few months. It is visible in industrial production, employment, real income and wholesale-retail trade. The technical indicator of a recession is two consecutive quarters of negative economic growth as measured by a country's gross domestic product (GDP); although the National Bureau of Economic Research (NBER) does not necessarily need to see this occur to call a recession."[2]

There may also be a decline in personal and business optimism, and a decline in the rate of consumption and capital investment in business activity.

job growth 1960-2009, with recessions in gray

Recessions are defined using a number of advanced indicators by the National Bureau of Economic Research, a private think tank that includes both conservative and liberal economists.[3]

As a rough rule of thumb, a recession is underway when there is a decline in gross domestic product (GDP) for two consecutive quarters.

Contents

Remedies

Several strategies exist for dealing with recession:

  • Keynesian economics indicate deficit spending by government will deal with any short term losses by business.
  • Supply-side economics indicate government tax cuts will promote business capital investment.
  • laissez-faire economics recommend the government do nothing and not interfere with market forces.

See also

External link

references

  1. Money magazine
  2. Recession
  3. See US Business Cycle Expansions and Contractions
Personal tools