majandusooreksus

Majandusooreksus, also known as economic recession, is a general decline in economic activity that is characterized by a significant drop in gross domestic product (GDP), increased unemployment, and a reduction in consumer spending. It is typically measured by a sustained decrease in real GDP over two consecutive quarters. Recessions are often triggered by various factors, including financial crises, economic bubbles, and global economic downturns.

The causes of a recession can be diverse and complex. Financial crises, such as the 2008 global financial crisis, can lead to a recession as banks and financial institutions face liquidity issues, leading to reduced lending and investment. Economic bubbles, where asset prices inflate beyond their fundamental value, can burst, causing a sharp decline in asset values and economic activity. Global economic downturns, such as those caused by the COVID-19 pandemic, can also lead to recessions as international trade and investment decrease.

The effects of a recession are widespread and can impact various sectors of the economy. Increased unemployment and underemployment can lead to reduced consumer spending, further exacerbating the economic decline. Businesses may face reduced profits and increased costs, leading to job cuts and closures. Government revenues may decrease, leading to budget cuts and increased public debt.

Economic policies, such as fiscal stimulus and monetary policy, are often employed to mitigate the effects of a recession. Fiscal stimulus involves government spending and tax cuts to boost economic activity, while monetary policy involves central banks lowering interest rates to encourage borrowing and spending. Despite these efforts, recessions can have long-lasting effects on the economy, including reduced economic growth and increased inequality.