Difference between revisions of "Recession"
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A '''recession''' implies at least two quarters of negative economic activity. [http://money.cnn.com/2008/03/06/pf/minds_over_money.moneymag/index.htm?postversion=2008031312] | A '''recession''' implies at least two quarters of negative economic activity. [http://money.cnn.com/2008/03/06/pf/minds_over_money.moneymag/index.htm?postversion=2008031312] | ||
| − | It is a | + | It is a increase in an economy's [[unemployment]]; output and profits fall; personal income falls. |
| + | |||
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. | 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. | ||
| + | [[File:Employed.jpg|thumb|400px|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.<ref> See [http://www.nber.org/cycles.html US Business Cycle Expansions and Contractions]</ref> | |
| + | As a rough rule of thumb, a recession is underway when there is a decline in [[gross domestic product]] (GDP) for two consecutive quarters. | ||
| + | ==Remedies== | ||
Several strategies exist for dealing with recession: | Several strategies exist for dealing with recession: | ||
* [[Keynesian]] economics indicate deficit spending by government will deal with any short term losses by business. | * [[Keynesian]] economics indicate deficit spending by government will deal with any short term losses by business. | ||
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* [[Panic of 1893]] | * [[Panic of 1893]] | ||
* [[Panic of 1907]] | * [[Panic of 1907]] | ||
| + | |||
| + | ==External link== | ||
| + | * [http://www.nber.org/cycles.html US Business Cycle Expansions and Contractions], official NBER dates | ||
| + | |||
| + | ====references==== | ||
| + | <references/> | ||
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[[Category:Economics]] | [[Category:Economics]] | ||
[[Category:Economic history]] | [[Category:Economic history]] | ||
Revision as of 16:46, October 2, 2009
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.
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.
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.[1]
As a rough rule of thumb, a recession is underway when there is a decline in gross domestic product (GDP) for two consecutive quarters.
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
- Recession of 2008
- Bank run
- Financial Crisis of 2008
- Great Depression
- Panic of 1837
- Panic of 1893
- Panic of 1907
External link
- US Business Cycle Expansions and Contractions, official NBER dates
