Recession

Definition

A recession is a period of significant economic decline characterized by a contraction in the gross domestic product (GDP), high unemployment rates, and declining business activity. It is typically marked by two consecutive quarters of negative GDP growth.

Related terms

Monetary Policy: Monetary policy refers to the actions taken by the central bank to manage the money supply and interest rates in order to influence economic activity.

Fiscal Stimulus: Fiscal stimulus refers to government policies aimed at boosting economic growth during a recession through increased government spending or tax cuts.

Automatic Stabilizers: Automatic stabilizers are mechanisms built into fiscal policy that kick in automatically during an economic downturn, such as increased unemployment benefits or reduced taxes, helping stabilize the economy.