Recession

Extracted Attributes

• Consequences

  Job losses, reduced income, declining investments, lower levels of employment, worsening corporate performance, deteriorating stock market results, higher borrowing costs.

• EU Definition

  Similar to the US definition.

• UK Definition

  Negative economic growth for two consecutive quarters.

• US Definition

  A significant decline in economic activity spread across the market, lasting more than a few months, normally visible in real GDP, real income, employment, industrial production, and wholesale-retail sales.

• Typical Causes

  Financial crisis, external trade shock, adverse supply shock, bursting of an economic bubble, large-scale anthropogenic or natural disaster (e.g., a pandemic), waning confidence, structural changes, economic shocks, psychological forces.

• Canada Definition

  Negative economic growth for two consecutive quarters.

• Types of Recovery

  K-Shaped, L-Shaped, U-Shaped, V-Shaped, W-Shaped.

• General Definition

  A broad decline in economic activity, typically resulting from a widespread drop in spending (adverse demand shock).

• Common Rule of Thumb

  Two consecutive quarters of negative gross domestic product (GDP) growth.

• Governmental Response

  Expansionary macroeconomic policies (e.g., increasing money supply, decreasing interest rates, increasing government spending, decreasing taxation).

• IMF Stance on Definition

  No official or universally agreed-upon definition.

• Phases of Business Cycle

  Growth, peak, recession, trough.

• US Official Declaring Body

  National Bureau of Economic Research (NBER).

Timeline

• The All-In Podcast episode 186 discusses concerns from Chamath Palihapitiya that a recession might still follow, despite positive indicators like cooling inflation and the high likelihood of a rate cut, due to the S&P 500's gains being narrowly driven by a few tech giants. (Source: Related Document 959aa5af-793e-4ed6-8fcf-daf30b27fb0f)

  2024

Recession

In economics, a recession is a business cycle contraction that occurs when there is a period of broad decline in economic activity. Recessions generally occur when there is a widespread drop in spending (an adverse demand shock). This may be triggered by various events, such as a financial crisis, an external trade shock, an adverse supply shock, the bursting of an economic bubble, or a large-scale anthropogenic or natural disaster (e.g. a pandemic). There is no official definition of a recession, according to the International Monetary Fund. In the United States, a recession is defined as "a significant decline in economic activity spread across the market, lasting more than a few months, normally visible in real GDP, real income, employment, industrial production, and wholesale-retail sales." The European Union has adopted a similar definition. In the United Kingdom and Canada, a recession is defined as negative economic growth for two consecutive quarters. Governments usually respond to recessions by adopting expansionary macroeconomic policies, such as increasing money supply and decreasing interest rates or increasing government spending and decreasing taxation.

Web Search Results

• Recession: Definition, Causes, and Examples - Investopedia

  A recession is a significant, widespread, and prolonged downturn in economic activity. Recessions are commonly characterized by two consecutive quarters of negative gross domestic product (GDP) growth, though there are more complex ways to assess and classify downturns. [...] A recession is a significant and widespread downturn in economic activity that typically lasts for longer than a few months. A common rule of thumb is that two consecutive quarters of shrinkage in gross domestic product (GDP) indicate a recession. However, it's much more complex than that. ### Key Takeaways [...] 1. K-Shaped Recovery 2. L-Shaped Recovery 3. U-Shaped Recovery 4. V-Shaped Recovery 5. W-Shaped Recovery Close Definition A recession is a prolonged, broad, and significant downturn in economic activity. ## What Is a Recession?

• What Is a Recession? Definition, Causes, and Impacts

  A recession is a decline in economic activity lasting over a few months. A depression is a more severe recession, but there has only been one major economic depression in the US. Consequences of recession include job losses, reduced income, and declining investments. [...] A recession is a significant period of economic decline, typically when the economy shrinks. A recession is also defined as two consecutive quarters of negative GDP, but many economists view a recession as more widespread and requiring a significant rise in unemployment. ### What would a recession look like? [...] According to the National Bureau of Economic Research (NBER), a nonprofit organization that officially declares US recessions and expansions, the technical definition of a recession is "a significant decline in economic activity that is spread across the economy and that lasts more than a few months." Over the course of a business cycle, GDP might contract for a period of time, but that doesn't necessarily mean that there's a recession.

• What is a recession and what does it mean for you? | Fidelity

  A recession is a prolonged period of negative economic growth in a country. It's 1 of 4 phases in the endless economic circle of life, spanning from growth to peak to recession to trough (aka the bottom of the recession)—and back again. While it's frustrating that economic progress doesn't travel in a straight upward line, it's helpful to keep in mind that historically, periods of recession have occurred much less than periods of expansion and growth. And the US has recovered from every [...] In a recession, the economy shrinks, which can lead to lower levels of employment, worsening corporate performance, deteriorating stock market results, and higher borrowing costs for both consumers and companies. [...] Recessions are the normal part of the economic life cycle when things aren't going well. It's the opposite of economic expansion. While experiencing a recession may be unavoidable, understanding what they are and how they work can provide some perspective and help you prepare to weather the next one. Feed your brain. Fund your future. Subscribe now ### What is a recession?

• Recession: When Bad Times Prevail

  There is no official definition of recession, but there is general recognition that the term refers to a period of decline in economic activity. Very short periods of decline are not considered recessions. Most commentators and analysts use, as a practical definition of recession, two consecutive quarters of decline in a country’s real (inflation-adjusted) gross domestic product (GDP)—the value of all goods and services a country produces. Although this definition is a useful rule of thumb, it [...] In the United States, the private National Bureau of Economic Research (NBER), which maintains a chronology of the beginning and ending dates of US recessions, uses a broader definition and considers a number of measures of activity to determine the dates of recessions. The NBER’s Business Cycle Dating Committee defines a recession as “a significant decline in economic activity spread across the economy, lasting more than a few months, normally visible in production, employment, real income, [...] and other indicators. A recession begins when the economy reaches a peak of activity and ends when the economy reaches its trough.” Consistent with this definition, the Committee focuses on a comprehensive set of measures—including not only GDP, but also employment, income, sales, and industrial production—to analyze the trends in economic activity.

• What happens in a recession? - John Hancock Investments

  The National Bureau of Economic Research (NBER), a leading economic think tank founded in 1920, is the generally recognized authority in the United States when it comes to declaring a recession. It calls a recession “a significant decline in economic activity spread across the economy, lasting more than a few months, normally visible in real GDP (Gross Domestic Product), real income, employment, industrial production, and wholesale-retail sales.”¹ [...] From a technical standpoint, a recession is often defined as two consecutive quarters of shrinking gross domestic product (GDP). But more simply, it’s a sustained contraction in economic activity. Dwindling production and consumption as well as higher unemployment or lower prices are telltale signs the economy has made its way into recession territory. [...] Recessions generally stem from waning confidence and a sense among businesses and consumers that the economic tide is shifting. But from a broader perspective, recessions are often the result of structural changes in one or more key industries, economic shocks, or even psychological forces such as extreme optimism (which can lead to speculative behavior). Financial bubbles bursting (such as the stock market crash of 1929 or the real estate crash of 2007) can also be the cause of recessions.

• Instance Of

  Q4167410

In economics, a recession is a business cycle contraction when there is a general decline in economic activity. Recessions generally occur when there is a widespread drop in spending (an adverse demand shock). This may be triggered by various events, such as a financial crisis, an external trade shock, an adverse supply shock, the bursting of an economic bubble, or a large-scale anthropogenic or natural disaster (e.g. a pandemic). In the United States, a recession is defined as "a significant decline in economic activity spread across the market, lasting more than a few months, normally visible in real GDP, real income, employment, industrial production, and wholesale-retail sales." The European Union has adopted a similar definition. In the United Kingdom, a recession is defined as negative economic growth for two consecutive quarters. Governments usually respond to recessions by adopting expansionary macroeconomic policies, such as increasing money supply or increasing government spending and decreasing taxation.