Friday, May 30, 2008

Definition of recession

It feels like a recession doesn't it? High gas prices, high food prices, mortgage crises, the sagging American peso and low wage growth affect most all of us pretty directly. Recession is a vague term in a discipline that is rarely vague, but in general it describes a slump in economic activity, generally measured in real GDP growth. Strictly speaking, it should be at least two successive quarters of negative GDP growth. Quarterly GDP numbers were released yesterday and it is hard to see "recession" in this graph. I guess we need a different word to describe an economy that feels really bad, but is still growing just fine, and in fact appears to be on the mend.

2 comments:

Anonymous said...

Maybe 'hangover' is the word you're looking for...

Unknown said...

or, to Pete's Hangover, that after effects of a binge economy; we've been so materialistic as a culture, perhaps this is a correction for all that going into debt to buy the coolest car and biggest house. Now we have those cool things but don't have the cash to maintain them-with gas and energy prices what they've become....