recessjon

Recessjon is a period of widespread and sustained decline in economic activity across an economy. It is typically marked by falling real gross domestic product (GDP), lower real income, rising unemployment, decreased industrial production, and weaker consumer demand. The exact start and end dates are usually determined by statistical agencies or central banks, rather than a fixed rule.

Official designation of a recession varies by country. In the United States, the National Bureau of Economic Research (NBER) dates recessions by examining multiple indicators, including GDP, income, employment, industrial production, and wholesale-retail trade. Other countries use similar, though not identical, criteria. A common informal guideline is that a recession involves several months of shrinking real GDP, but the formal decision is made by statistical authorities after data are analyzed.

Causes of recessions are diverse and can include demand shocks, supply disruptions, financial crises, high interest rates, and external events such as commodity price spikes or geopolitical tensions. Recessions often spread through economies via reduced consumer spending, lower investment, and tighter credit conditions. They can be triggered by policy errors, sudden changes in asset prices, or structural imbalances that accumulate over time.

Impacts of recessions include higher unemployment, reduced household income, corporate layoffs, bankruptcies, and slower wage growth. Household and government debt burdens can worsen financial stress, and social indicators such as poverty and inequality may be affected. Recoveries vary in speed and can be gradual or abrupt, depending on policy responses and underlying economic conditions.

Policy responses commonly involve countercyclical monetary measures (lower interest rates, liquidity support) and fiscal actions (stimulus, automatic stabilizers, targeted transfers) aimed at stabilizing demand and restoring growth. Critics note that GDP-based measures may overlook underemployment, quality of life, and distributional effects.