Stock Market Investors » Glossary of Stock Terms » What is Recession?

What is Recession?

The economy goes through different cycles. One of them is recession. It is observed when the prices start to increase, the living standard starts to fall, unemployment rises, and businesses stop expanding.

Another indicator of recession is a decreasing gross national product (GDP) of a nation. In fact, many experts consider that there is an economic recession only when a negative GDP growth has been observed over two consecutive quarters.

However, it is generally considered that a recession starts when there have been several quarters of slowing even if they have been positive.

Definition of Recession

Economic recession is defined as a significant decline in the economic activity across a country, lasting longer than a few months. Normally, the recession is visible in real GDP growth, industrial production, wholesale-retail trade, real personal income, and employment.

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