What is a Recession
This video provides a detailed explanation on how to define a period of economic recession. Recessions is basically any downtrend trend in the business cycle which leads to a decline in employment, followed by decreased consumer spending, followed by decreased output.
Economists look for two consecutive quarters of negative GDP as a gauge for recession. Recession can be a self fullfilling prophecy if there is enough fear in the marketplace.
The speaker mentions the following triggers that can lead to a recession; speculation, national debt, inflation, devalued currency, and the excessive use of derivatives.
He then moves into covering the effects of a recession; which can include, unemployment, foreclosure, bankruptcy, a falling stock market, inflation, and less bank lending.
He reviews the different schools of thought which discuss how to get out of a recession. Keynesian economics advocates deficit spending by the government to invest in the economy to jumpstart growth. Supply side economic belief suggest that taxes should be cut to allow consumers to save more money and spend it in the economy. Finally, the most capitalistic approach laissez faire economics which is a hands off approach and suggests that the market should be able to sort itself out without a helping hand.
Economists look for two consecutive quarters of negative GDP as a gauge for recession. Recession can be a self fullfilling prophecy if there is enough fear in the marketplace.
Factors leading to a Recession
The speaker mentions the following triggers that can lead to a recession; speculation, national debt, inflation, devalued currency, and the excessive use of derivatives.
Effects of a Recession
He then moves into covering the effects of a recession; which can include, unemployment, foreclosure, bankruptcy, a falling stock market, inflation, and less bank lending.
Reversing a Recession
He reviews the different schools of thought which discuss how to get out of a recession. Keynesian economics advocates deficit spending by the government to invest in the economy to jumpstart growth. Supply side economic belief suggest that taxes should be cut to allow consumers to save more money and spend it in the economy. Finally, the most capitalistic approach laissez faire economics which is a hands off approach and suggests that the market should be able to sort itself out without a helping hand.
Facebook
Twitter
LinkedIn
Email
