4 Definitions of Recession
John Spacey, September 13, 2022
A recession is a prolonged economic downturn. These can be identified with the combination of a definition and economic data. Beyond a definitional recession, a recession can be called by economists as subject matter experts. The following are common definitions of a recession.1. Zero or negative growth of GDP in at least two successive quarters.2. Negative economic growth for at least six months.3. A significant decline in economic activity that is spread across the economy that lasts longer than a few months.4. A prolonged economic decline of six months or more that is normally visible in measures of GDP growth, income, employment, industrial production and retail sales.
DiscussionIn an inflationary environment, a decline in nominal GDP has more negative impact. For example, if GDP declines 4% and inflation is 10% real financial conditions are rapidly getting worse as the economy is producing less GDP and that GDP has less real value.The first two definitions (above) provide a bright line that anyone can use to identify recessions after they occur. The latter two definitions require interpretation by a subject matter expert such as an economist.
Economic ProblemsThis is the complete list of articles we have written about economic problems.
If you enjoyed this page, please consider bookmarking Simplicable.
Economic ProblemsSeveral types of severe economic problems.
A list of common economic issues.
An overview of scarcity with examples.
UnemploymentAn overview of unemployment with examples.
The common types of unemployment.
Economic OutcomesA list of common economic outcomes.
EconomicsEveryday examples of economics.
An overview of the food industry.
An overview of externalities with examples.
An overview of market change.
Productivity ExamplesA list of productivity examples.
Factors Of ProductionExamples for each of the four factors of production.
Types Of Business
A list of the common types of business.
An overview of economic context with examples.
The common types of economic benefit.
An overview of economic competitiveness with examples.
TrendingThe most popular articles on Simplicable in the past day.
New ArticlesRecent posts or updates on Simplicable. Site Map
© 2010-2023 Simplicable. All Rights Reserved. Reproduction of materials found on this site, in any form, without explicit permission is prohibited.
View credits & copyrights or citation information for this page.