Recession

economic recessioneconomic downturndepressionrecessionsdownturneconomic slowdowneconomic depressionslumpcontractioneconomic contraction
In economics, a recession is a business cycle contraction when there is a general slowdown in economic activity.wikipedia
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Business cycle

economic boomboomboom and bust
In economics, a recession is a business cycle contraction when there is a general slowdown in economic activity.
These fluctuations typically involve shifts over time between periods of relatively rapid economic growth (expansions or booms), and periods of relative stagnation or decline (contractions or recessions).

Financial crisis

economic crisisfinancial criseseconomic crises
This may be triggered by various events, such as a financial crisis, an external trade shock, an adverse supply shock or the bursting of an economic bubble.
In the 19th and early 20th centuries, many financial crises were associated with banking panics, and many recessions coincided with these panics.

Economic bubble

bubblespeculative bubblebubble economy
This may be triggered by various events, such as a financial crisis, an external trade shock, an adverse supply shock or the bursting of an economic bubble.
Both the boom and the burst phases of the bubble are examples of a positive feedback mechanism, in contrast to the negative feedback mechanism that determines the equilibrium price under normal market circumstances.

National Bureau of Economic Research

NBERThe National Bureau of Economic ResearchNational Bureau of Economic Research (NBER)
In the United States, the Business Cycle Dating Committee of the National Bureau of Economic Research (NBER) is generally seen as the authority for dating US recessions.
The NBER is well known for providing start and end dates for recessions in the United States.

Monetary policy

monetarymonetary policiesunconventional monetary policy
Governments usually respond to recessions by adopting expansionary macroeconomic policies, such as increasing money supply, increasing government spending and decreasing taxation. Monetarists would favor the use of expansionary monetary policy, while Keynesian economists may advocate increased government spending to spark economic growth.
It is traditionally used to try to combat unemployment in a recession by lowering interest rates in the hope that less expensive credit will entice businesses into expanding.

List of recessions in the United Kingdom

previous crisesrecessionsUK recession
In the United Kingdom, recessions are generally defined as two consecutive quarters of negative economic growth, as measured by the seasonal adjusted quarter-on-quarter figures for real GDP, with the same definition being used for all other member states of the European Union.
This is a list of (recent) recessions (and depressions) that have affected the economy of the United Kingdom.

Depression (economics)

economic depressiondepressiondepressions
A severe (GDP down by 10%) or prolonged (three or four years) recession is referred to as an economic depression, although some argue that their causes and cures can be different.
It is a more severe economic downturn than a recession, which is a slowdown in economic activity over the course of a normal business cycle.

Macroeconomics

macroeconomicmacroeconomistmacroeconomic policy
Governments usually respond to recessions by adopting expansionary macroeconomic policies, such as increasing money supply, increasing government spending and decreasing taxation. Macroeconomic indicators such as GDP (gross domestic product), investment spending, capacity utilization, household income, business profits, and inflation fall, while bankruptcies and the unemployment rate rise.
Business cycles can cause short-term drops in output called recessions.

Fiscal policy

fiscalfiscal policiesfiscal management
Governments usually respond to recessions by adopting expansionary macroeconomic policies, such as increasing money supply, increasing government spending and decreasing taxation.
Neutral fiscal policy is usually undertaken when an economy is in neither a recession nor a boom. The amount of government deficit spending (the excess not financed by tax revenue) is roughly the same as it has been on average over time, so no changes to it are occurring that would have an effect on the level of economic activity.

Recession shapes

double-dip recessiondouble dip recessiondouble dip
As an informal shorthand, economists sometimes refer to different recession shapes, such as V-shaped, U-shaped, L-shaped and W-shaped recessions.
Recession shapes are used by economists to describe different types of recessions.

Keynesian economics

KeynesianKeynesianismKeynesian economists
A liquidity trap is a Keynesian theory that a situation can develop in which interest rates reach near zero (zero interest-rate policy) yet do not effectively stimulate the economy. Monetarists would favor the use of expansionary monetary policy, while Keynesian economists may advocate increased government spending to spark economic growth.
Keynesian economics (sometimes called Keynesianism) are the various macroeconomic theories about how in the short run – and especially during recessions – economic output is strongly influenced by aggregate demand (total demand in the economy).

Deficit spending

budget deficitdeficitstructural deficit
Krugman discussed the balance sheet recession concept during 2010, agreeing with Koo's situation assessment and view that sustained deficit spending when faced with a balance sheet recession would be appropriate.
The mainstream economics position is that deficit spending is desirable and necessary as part of countercyclical fiscal policy, but that there should not be a structural deficit (i.e., permanent deficit): The government should run deficits during recessions to compensate for the shortfall in aggregate demand, but should run surpluses in boom times so that there is no net deficit over an economic cycle (i.e., only run cyclical deficits and not structural deficits).

Government spending

public spendingpublic fundspublic investment
Monetarists would favor the use of expansionary monetary policy, while Keynesian economists may advocate increased government spending to spark economic growth.
Expansionary fiscal policy can be used by governments to stimulate the economy during a recession.

Paradox of thrift

Too many consumers attempting to save (or pay down debt) simultaneously is called the paradox of thrift and can cause or deepen a recession.
This paradox is based on the proposition, put forth in Keynesian economics, that many economic downturns are demand-based.

Inflation

inflation rateprice inflationfood inflation
Economist Walter Heller, chairman of the Council of Economic Advisers in the 1960s, said that "I call it a Reagan-Volcker-Carter recession. The resulting taming of inflation did, however, set the stage for a robust growth period during Reagan's administration.
Low (as opposed to zero or negative) inflation reduces the severity of economic recessions by enabling the labor market to adjust more quickly in a downturn, and reduces the risk that a liquidity trap prevents monetary policy from stabilizing the economy.

Conference Board Leading Economic Index

Index of Leading Economic IndicatorsLeading Economic IndexIndex of Leading (Economic) Indicators
Index of Leading (Economic) Indicators (includes some of the above indicators).
These variables have historically turned downward before a recession and upward before an expansion.

Money

monetaryspeciecash
For example, if companies expect economic activity to slow, they may reduce employment levels and save money rather than invest.
A failed monetary policy can have significant detrimental effects on an economy and the society that depends on it. These include hyperinflation, stagflation, recession, high unemployment, shortages of imported goods, inability to export goods, and even total monetary collapse and the adoption of a much less efficient barter economy.

Early 1980s recession

recessionrecession of the early 1980seconomic recession
July 1981 – November 1982: 15 months
The early 1980s recession was a severe global economic recession that affected much of the developed world in the late 1970s and early 1980s.

Federal funds rate

fed funds rateinterest ratesbase rate
Inverted yield curve, the model developed by economist Jonathan H. Wright, uses yields on 10-year and three-month Treasury securities as well as the Fed's overnight funds rate. Another model developed by Federal Reserve Bank of New York economists uses only the 10-year/three-month spread. It is, however, not a definite indicator;
The Federal Reserve has responded to a potential slow-down by lowering the target federal funds rate during recessions and other periods of lower growth.

Early 2000s recession

recession2001 recession2001 contraction
March 2001 – November 2001: 8 months
The recession affected the European Union during 2000 and 2001 and the United States in 2002 and 2003.

Unemployment

unemployedunemployment ratejob creation
Macroeconomic indicators such as GDP (gross domestic product), investment spending, capacity utilization, household income, business profits, and inflation fall, while bankruptcies and the unemployment rate rise.
During periods of recession, an economy usually experiences a relatively high unemployment rate.

Great Recession

late-2000s recessionrecessionlate 2000s recession
The most recent recession to affect the United Kingdom was the late-2000s recession.
That IMF definition requires a decline in annual real world GDP percapita . Despite the fact that quarterly data are being used as recession definition criteria by all G20 members, representing 85% of the world GDP, the International Monetary Fund (IMF) has decided—in the absence of a complete data set—not to declare/measure global recessions according to quarterly GDP data.

Great Recession in the United States

Great Recessionrecession2008 recession
The 2007–2009 recession saw private consumption fall for the first time in nearly 20 years.
In the early months of 2008, many observers believed that a U.S. recession had begun.

Aggregate demand

disaggregationeffective aggregate demandaggregate
Most mainstream economists believe that recessions are caused by inadequate aggregate demand in the economy, and favor the use of expansionary macroeconomic policy during recessions.
Conversely, if the debt level is 300% of GDP and 1% of loans are not repaid, this impacts GDP by 1% of 300% = 3% of GDP, which is significant: a change of this magnitude will generally cause a recession.

Deflation

deflationarydeflationary spiralmoney supply contracted
Deflation
Deflation usually happens when supply is high (when excess production occurs), when demand is low (when consumption decreases), or when the money supply decreases (sometimes in response to a contraction created from careless investment or a credit crunch).