Finance Library
EconomicsIntermediate 4 min read
Recession
What it actually means when the economy goes backwards.
The simple definition
A recession is a meaningful, broad drop in economic activity that lasts more than a few months — usually showing up in GDP, employment, and incomes at the same time.
Why they happen
Recessions follow a long list of causes: rising interest rates, asset bubbles popping, oil shocks, pandemics, or simple loss of confidence. They're a normal part of the business cycle.
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