Difference between revisions of "Recession"
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A '''recession''' is a decrease in an [[economy]]'s [[employment]] and output and the [[income]] of its citizens. Typically there is also a decline in personal and business optimism, and a decline in the rate of [[consumption]] and capital [[investment]] in business activity. | A '''recession''' is a decrease in an [[economy]]'s [[employment]] and output and the [[income]] of its citizens. Typically there is also a decline in personal and business optimism, and a decline in the rate of [[consumption]] and capital [[investment]] in business activity. | ||
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| + | The generally accepted definition of a recession is based on the decline in [[gross domestic product]] (GDP) for two consecutive quarters. In the United States the [[National Bureau of Economic Research]] makes the decision on if the economy has entered a recession, and when it is completed although local areas may be impacted before the nation. | ||
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| + | 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|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]]. | ||
[[Category:Economics]] | [[Category:Economics]] | ||
Revision as of 00:34, June 7, 2008
A recession is a decrease in an economy's employment and output and the income of its citizens. Typically there is also a decline in personal and business optimism, and a decline in the rate of consumption and capital investment in business activity.
The generally accepted definition of a recession is based on the decline in gross domestic product (GDP) for two consecutive quarters. In the United States the National Bureau of Economic Research makes the decision on if the economy has entered a recession, and when it is completed although local areas may be impacted before the nation.
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.
