Recession

A recession is usually defined in macroeconomics as a fall of a country's real Gross Domestic Product in two or more successive quarters of a year. A recession may also involve falling prices, which can lead to a depression; alternatively it may involve sharply rising prices (inflation), in which case this process is known as stagflation. Most recessions lead to falling inflation rates or what is called disinflation.

Related Topics:
Macroeconomics - Real - Gross Domestic Product - Quarter - Depression - Inflation - Stagflation - Disinflation

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In a developed capitalist / free market economy, recessions come and go at fairly regular intervals - often 5-10 years - in what is known as the business cycle. Government intervention can smooth the cycle (see also Keynesianism), and especially cushion its effects on its citizens (see welfare state), but so far has proven unable to eliminate the cycle completely.

Related Topics:
Capitalist - Free market - Business cycle - Government - Keynesianism - Welfare state

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