Glossary – Recession

Definition

A period of declining economic output, generally identified by negative economic growth in two successive quarters.


Example

If the gross domestic product (GDP) of a country declines for two consecutive quarters (two three month periods) for whatever reasons, the economy of this country is said to be in a recession. 


Relevance

Even though recessions are not a pleasant experience for most economic actors, they are an essential part of the business cycle. However, policy makers may influence the duration and severity of a recession by taking appropriate measures at the right time.

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