Economic Recession - Definition

Macroeconomics believes that the recession is a period of decline in GDP of an economy. The National Bureau of Economic Research (National Bureau of Economic Research) of the United States considers any recession continued decline in economic activity for two or more consecutive quarters. A continuing situation of recession is known as depression. A short recession is often called economic correction. However, some economists, including John Kenneth Galbraith believe that you can not establish a reasonable difference between these three terms beyond the desire to avoid the panic that seizes the population.

In the nineteenth century developments of the same magnitude were called crisis. In another simple example we could say that the recession is when people stop investing their money to keep their cash in their hands.

Recessions are caused mainly by economic shocks. The greatest depression of the twentieth century was the Great Depression of the 1930s. Other notables include two recessions oil shocks of the'70s.