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Recession and Its Aftermath pp 1–22Cite as

Understanding Recession: Conceptual Arguments and US Adjustments

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Abstract

Recession is an economic phase when various sectors of the economy reflect working at the bottom for at least two quarters of a calendar year. Investment declines, unemployment increases, income declines, the growth rate falls, asset values collapse, consumption falls, and overall the economy is in crisis. Conventionally, a recession is said to occur when GDP falls for at least two consecutive calendar quarters. For the US economy, a recession is officially indicated by the National Bureau of Economic Research. “Recession” is also termed “contraction” or “slump.” Following a recession, there is often a boom, i.e., expansion, and thus this reverses the effects of a recession. In a recession, there is a reduction in production, resulting in high unemployment. During a boom, however, there is a rapid rise in prices. The period from recession to recovery and boom is called a business cycle or trade cycle. There are short-run macro problems but these do not last long because of corrective measures taken by one or many market players, including interventions by the government.

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Authors and Affiliations

  1. Department of Economics, Babasaheb Bhimrao Ambedkar University, Lucknow, India

    N. M. P. Verma

  2. School of Public Policy, University of Maryland, College Park, MD, USA

    V. Dutta

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  1. N. M. P. Verma
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  2. V. Dutta
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Correspondence to N. M. P. Verma .

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Editors and Affiliations

  1. , Economics, BB Ambedkar University, Rbly Road, Lucknow, 226025, Uttar Pradesh, India

    NMP Verma

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Verma, N.M.P., Dutta, V. (2013). Understanding Recession: Conceptual Arguments and US Adjustments. In: Verma, N. (eds) Recession and Its Aftermath. Springer, India. https://doi.org/10.1007/978-81-322-0532-6_1

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