postrecession

Postrecession is a term used to describe the period that follows the end of an economic recession, during which an economy resumes and sustains growth. The end of a recession is typically determined by statistical agencies when real GDP stops contracting and begins to expand for a sequence of quarters, though the precise dating and criteria vary by country. The postrecession phase is characterized by a gradual recovery in output, employment, and income, but the pace and profile of the recovery are not uniform across sectors or regions.

During postrecession, consumer demand, business investment, and confidence generally improve as households repair balance sheets, access to credit normalizes, and inventories are rebuilt. Unemployment tends to fall after a lag, while inflation remains subdued if there is ample slack and loose monetary policy, or rises if demand strengthens rapidly. The shape of the recovery can be V-shaped, U-shaped, or more uneven, depending on the severity of the prior shock and the balance sheets of households and firms.

Policy responses in the aftermath often include gradual normalization of monetary policy, unwinding of emergency measures where appropriate, and targeted fiscal measures to boost growth potential. Structural reforms, productivity improvements, and credit market health influence the durability of a postrecession expansion. Financial stability concerns, such as debt levels and asset valuations, can affect both timing and strength.

Outcomes in the postrecession period vary widely by country and region. Some households experience a broad improvement in living standards and employment, while others face slower wage growth or labor market scarring. Long-term effects depend on the recovery of productivity, the degree of resource reallocation, and the resilience of financial institutions. Data revisions can modify assessments of when a recession ended and how quickly the recovery progressed.