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A common way to measure the length of a recession is to start counting as soon as the GDP drops for two quarters in a row, and stop counting when the GDP recove
by mikeyouse 11y ago
A common way to measure the length of a recession is to start counting as soon as the GDP drops for two quarters in a row, and stop counting when the GDP recovers past that 'zero point'. A slight slowing in the rate of decline after years of recession isn't quite a recovery so you wouldn't start the clock from there. You can see a similar local max. in the Great Depression line when the government stopped the stimulus programs and passed a law to balance the budget.
- corin_ 11y agoIt's still a recession until it hits 'zero' again, even if there is solid growth? E.g. if a country started with a GDP of 100, dropped to 10 in a single year, and then over the next 90 years grew its GDP by 1 each year, it would be 90 years of economic growth but still a recession?
- mikeyouse 11y agoTechnically the recession is only when GDP drops for at least two consecutive quarters, what follows is the recovery phase. It's just common phrasing to call the whole period the recession or depression. In your example, there'd be a 1-year recession with a 90-year recovery.