What is Recession ?

As promised in my previous blog, here is a short note on Recession.

Recession is defined as a significant decline in activity spread across the economy, lasting longer than a few months (for the purpose of definition, this state should exist for atleast 2 consecutive quarters). The technical indicator of a recession is two consecutive quarters of negative economic growth as measured by a country's gross domestic product (GDP).

To know more about GDP,

What is Gross Domestic Product (GDP) ?


Recession is a an unpleasant part of the business cycle. A recession generally lasts from six to 18 months and in this period, the central bank reduces the interest rates to stimulate the economy by offering cheap rates at which to borrow money and so that businesses can offer compeeling values for their products and remain profitable.