BROWSE

Recession

A recession may be broadly defined as a considerable decline in economic activities all across the country or region (as the case may be). A recession to be classified as such, must last longer than at least a few months.

If the recession persists beyond a few months, stretching on for years with a steep 10% or more drop in GDP (Gross Domestic Product) levels, this is called an economic depression. The worst case was the global depression brought on by the stock market crash of 1929 in USA.

In macroeconomic terms, negative economic growth for at least two consecutive quarters would be referred to as a recession. It typically heralds a slowdown or slump in the national economy that affects all aspects of production, trade as well as investment as they are measured in the nation’s GDP. A steep decline in capital assets such as property and financial assets such as shares and stocks is also a classic tell tale sign of a recessionary trend in the economy.

Low Employment

During a recession, economic activities slow down effectively, leading to a surge in unemployment levels. And since people don’t earn money, they have little to spend, and without spending, both production and trade take a hit as the vicious cycle is perpetuated.

Crime

Studies have also shown a direct correlation between recessionary trends as well as crime since unemployed people often seek recourse to criminal activities to make ends meet.

Measures to combat recession

To help curtain a recession and turn the economy around, various measures are undertaken. The economic leadership of a country tends to loosen its overall monetary policies by injecting more money into the system such as increasing the supply of liquid money.

The easiest way of doing this is to lower interest rates as well as increase govt. spending on development projects. This would have the dual advantage of not only increasing employment but also jump starting industrial activities in the private sector.

Taxation

Decreasing taxes is also a handy way of handling runaway recession. Low taxes would mean people would have higher disposable income and would be willing to spend more. Greater spending would mean more production.


Further Reading


Financing constraints and unemployment: Evidence from the Great Recession
www.sciencedirect.com [PDF]
This paper shows that financing constraints of small firms were one of the drivers of unemployment dynamics during the 2007–2009 recession in the United States. Specifically, workers in small firms were more likely to become unemployed during the 2007–2009 …

The great recession: Lessons from microeconomic dataThe great recession: Lessons from microeconomic data
pubs.aeaweb.org [PDF]
This paper shows that financing constraints of small firms were one of the drivers of unemployment dynamics during the 2007–2009 recession in the United States. Specifically, workers in small firms were more likely to become unemployed during the 2007–2009 …

Financialization, the great recession, and the stratification of the US labor marketFinancialization, the great recession, and the stratification of the US labor market
www.tandfonline.com [PDF]
This paper shows that financing constraints of small firms were one of the drivers of unemployment dynamics during the 2007–2009 recession in the United States. Specifically, workers in small firms were more likely to become unemployed during the 2007–2009 …

A monetary Minsky model of the Great Moderation and the Great RecessionA monetary Minsky model of the Great Moderation and the Great Recession
www.sciencedirect.com [PDF]
This paper shows that financing constraints of small firms were one of the drivers of unemployment dynamics during the 2007–2009 recession in the United States. Specifically, workers in small firms were more likely to become unemployed during the 2007–2009 …

Household Leverage and the Recession of 2007–09Household Leverage and the Recession of 2007–09
link.springer.com [PDF]
This paper shows that financing constraints of small firms were one of the drivers of unemployment dynamics during the 2007–2009 recession in the United States. Specifically, workers in small firms were more likely to become unemployed during the 2007–2009 …

The impact of the Great Recession and the housing crisis on the financing of America's largest citiesThe impact of the Great Recession and the housing crisis on the financing of America's largest cities
www.sciencedirect.com [PDF]
This paper shows that financing constraints of small firms were one of the drivers of unemployment dynamics during the 2007–2009 recession in the United States. Specifically, workers in small firms were more likely to become unemployed during the 2007–2009 …

Credit supply and business investment during the great recession: Evidence from public records of equipment financingCredit supply and business investment during the great recession: Evidence from public records of equipment financing
papers.ssrn.com [PDF]
This paper shows that financing constraints of small firms were one of the drivers of unemployment dynamics during the 2007–2009 recession in the United States. Specifically, workers in small firms were more likely to become unemployed during the 2007–2009 …

Post-Keynesian institutionalism after the great recessionPost-Keynesian institutionalism after the great recession
www.elgaronline.com [PDF]
This paper shows that financing constraints of small firms were one of the drivers of unemployment dynamics during the 2007–2009 recession in the United States. Specifically, workers in small firms were more likely to become unemployed during the 2007–2009 …

Introduction to the special issue on “ethics, global finance and the great recession”Introduction to the special issue on “ethics, global finance and the great recession”
www.tandfonline.com [PDF]
This paper shows that financing constraints of small firms were one of the drivers of unemployment dynamics during the 2007–2009 recession in the United States. Specifically, workers in small firms were more likely to become unemployed during the 2007–2009 …

Leadership challenges facing nonprofit human service organizations in a post-recession eraLeadership challenges facing nonprofit human service organizations in a post-recession era
www.tandfonline.com [PDF]
This paper shows that financing constraints of small firms were one of the drivers of unemployment dynamics during the 2007–2009 recession in the United States. Specifically, workers in small firms were more likely to become unemployed during the 2007–2009 …


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