What is the definition of a recession?
Recession is a decline in any country’s Gross Domestic Product (GDP), or negative real economic growth, for two or more successive quarters of a year.
However, this definition is not universally accepted. The American National Bureau of Economic Research defines a recession more ambiguously as “a significant decline in economic activity spread across the economy, lasting more than a few months.”
A recession may involve simultaneous declines in coincident measures of overall economic activity such as employment, investment, and corporate profits.
Recessions may be associated with falling prices (deflation), or, alternatively, sharply rising prices (inflation) in a process known as stagflation.
A severe or long recession is referred to as an economic depression. A devastating breakdown of an economy is called economic collapse.
Newspaper columnist Sidney J. Harris amusingly distinguished terms this way: a recession is when you lose your job; a depression is when I lose mine.
Market-oriented economies are characterized by economic cycles, but actual recessions (declines in economic activity) do not always result.
There is much debate as to whether government intervention smoothes the cycle (see Keynesianism), exaggerates it (see Real business cycle theory), or even creates it (see monetarism).
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Updated: 1st Q 2018