What is a recession and what are the causes and impacts of recessions? We answer these questions in our newest series, Ask an Economist.
00:25 – What is a recession?
02:10 – What are potential causes of a recession?
03:33 – What is the impact of a recession?
04:29 – What can governments do?…(read more)
BREAKING: Recession News
LEARN MORE ABOUT: Bank Failures
REVEALED: Best Investment During Inflation
HOW TO INVEST IN GOLD: Gold IRA Investing
A recession is a significant decline in economic activity that lasts for an extended period of time. It is a term that is often used in the context of macroeconomics, and can have a profound impact on a country’s economy and the lives of its citizens.
So, what exactly is a recession, and how does it happen? To get a better understanding of this concept, we asked an economist to explain.
An economist explains that a recession typically occurs when there is a contraction in the country’s gross domestic product (GDP) for two consecutive quarters. This means that the economy is producing less and there is a decrease in the overall demand for goods and services. As a result, businesses may experience a decline in sales and profits, leading to cut backs in production and potential layoffs.
There are a variety of factors that can contribute to a recession. These can range from a decrease in consumer spending and investment, to a decline in exports and industrial production. In many cases, recessions are also fueled by a variety of external shocks, such as natural disasters, geopolitical events, or shifts in global economic conditions.
The impact of a recession can be wide-reaching. Unemployment rates tend to rise as businesses suffer and are forced to reduce their workforce. Many individuals and families also experience financial hardships, as their incomes decrease and they struggle to keep up with living expenses.
So, what can be done to combat a recession? According to the economist, there are a number of economic policies that can be implemented to lessen the impact of a recession. These can include fiscal policies, such as increased government spending and tax cuts, as well as monetary policies, such as lowering interest rates and implementing quantitative easing measures.
Ultimately, a recession can be a challenging and complex economic phenomenon, with far-reaching implications for a country’s economy and its citizens. It is important for policymakers and individuals alike to be aware of the signs of a recession and to take appropriate measures to mitigate its effects. By understanding the nature of recessions and their causes, we can better prepare for and respond to economic downturns.
That’s what made him Alan – a fundamentally good and decent man.
My thoughts today are with his wife, Lisa, their kids, Ben and Sydney, his many students and colleagues, and everyone who loved and will miss Alan Krueger.
It’s part of what made him not only a great economist but a great teacher – someone who could make complicated subjects accessible and even fun. A landmark, real-world study on the positive impact of the minimum wage. His creation of the “Gatsby Curve” that illustrated the connection between concentrated wealth and social mobility between generations. A rollicking speech at the Rock and Roll Hall of Fame on how understanding the economics of rock and roll might help us solve one of his deepest concerns: rebuilding the middle class in a changing economy. Through it all, he had a perpetual smile and a gentle spirit – even when he was correcting you.
He saw economic policy not as a matter of abstract theories, but as a way to make people’s lives better.
He believed that facts, reason, and evidence could make government more responsive, and his enthusiasm and curiosity was truly infectious.
During his tenure as the Chair of my Council of Economic Advisors, he helped us return the economy to growth and sustained job creation, to bring down the deficit in a responsible way, and to set the stage for wages to rise again.
But Alan was someone who was deeper than numbers on a screen and charts on a page.
When I asked Alan Krueger to serve as my chief economist in the White House, he’d already had a stellar career inside and outside of government.
He spent the first two years of my administration helping to engineer our response to the worst financial crisis in 80 years, and to successfully prevent the chaos from spiraling into a second Great Depression.
HOW TO FIX WORLD ECONOMY: Force every NATO country pay a special tax to America in order to keep inflation down. You can call it the "Strong Currency Act" or something. If they were contributing to lowering inflation in America the U.S Central Bank wouldn't need to raise rates weakening their own currency against the dollar. Most of the money spent in U.S congress goes outside the United States to help other countries anyways. Why should Americans pay for it and not them. Tax Mexican labor instead of bringing them across the border into America. If they don't like it they should get booted from NATO and never get a single dollar ever again. They can also fight their own wars if they get attacked. They think they're entitled to come here anyways so we might as well tax them. Lack of job vacancies weaken the dollar and improve the economy according to some sources but is it really job vacancies that matter or is it employment numbers that matter?
HOW TO FIX WORLD ECONOMY: Force every NATO country pay a special tax to America in order to keep inflation down. You can call it the "Strong Currency Act" or something. If they were contributing to lowering inflation in America the U.S Central Bank wouldn't need to raise rates weakening their own currency against the dollar. Most of the money spent in U.S congress goes outside the United States to help other countries anyways. Why should Americans pay for it and not them. Tax Mexican labor instead of bringing them across the border into America. If they don't like it they should get booted from NATO and never get a single dollar ever again. They can also fight their own wars if they get attacked. They think they're entitled to come here anyways so we might as well tax them.
Suisse credit crises please explain
never met a rich economist.
so just ignore their manipulation
Very well done. However, the tricky part is about that "buffer to society " solution…it must be strategically done…Governments must come up with policies that speedily enhances the process. Rather than dole out money, use that to subsidise production, target specific supply chains, those with the highest rate of return and a short "gestation period"…it is a process that takes time but it is entirely worth…people learn to adjust, they do it better when they are guaranteed of a rewarding future…inflation is a global issue now, mostly as a result of enormous spending of governments across the world to cushion the effects of covid, the war also contributed, they gave people cash and food…money spent on an outcome rather than the process…now the world is both in an economic and financial crisis, and the less developed countries bear the brunt of it…my humble opinion!!!
awesome!!
IMF is 100% being disingenuous about crypto use case’s and how the common people could invest and benefit, but the global elites who run everything would never want a common man to profit as that’s reserved for only the elites