What is Economic Recession?
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A downturn in economic growth lasting several quarters or more is generally called as ‘recession’. In economics, the term recession is generally used to describe a situation in which a country’s GDP (gross domestic product) sustained a negative growth for at least two consecutive quarters. The National Bureau of Economic Research (NBER) defined recession as a “significant decline in the economic activity lasting more than a few months”. Some economists also suggest that a recession occurs when the natural growth rate in GDP is less than the average of 2%. Normally an economic recession continues at least a 1 year.
Types of recession:
• U shape
• W shape
• V shape
• L shape - this type of recession will last for 10 years. (Japan economy was the victim of this )
