What are the common causes of the recession?
There are many causes of recession that is defined as a decrease in gross domestic product (GDP) for at least two quarters of back to each other. This decline is less than 10%, so the small recession that occurs occasionally has only less effect on the economy. If there is a longer-term recession where GDP-oros are the sum of all public and private expenditure-it is 10%, it can have a huge impact on the economy, making it difficult to recover. It is perhaps easier to say that what causes the recession is this decline in expenditure on goods, services and investment, but what causes the private and public sectors to change its expenditure habits is not always constant.
Some financial experts suggest that the causes of recession are always inflated prices. As prices rise, people cannot spend so much and begin to budget and spend less than usually. Such a scenario means that no one really benefits from inflated prices and so companies lose money. This causes to take steps like less spending and shooting PRAciders. Since fewer people earn money, expenses are still decreasing. This cycle will not change until jobs have grown, or government and corporate expenses will increase again.
This description of the causes of recession does not explain the initial decline in expenditure or inflation and why prices are rising at once, especially if the expenses are lower. A more adequate description of one of the causes of the recession is that the economy goes through some form of shock that radically changes how the market is perceived. Such a shock could include things such as a physical attack on the country that occurred during 9/11 in the US, a rapid disintegration of industry, as happened during Dot.com busty 90 years or collapse of financial markets, such as housing market and stock market in mid 2000.
When these "shocks" occur, they dramatically affect the expenditure to a number of levels. People facing the closure of the market in their homes during the US housing crisis could not spendSo much and the lack of security people and investment companies experienced real estate investments and the stock market further reduced GDP. Other factors, such as inability to most people to get loans for their own capital or mortgage loans, disrupted their ability to spend with the loan. As is common, the decline in expenditure has led to an increase in prices or inflation, because traders and service providers have tried to recover their losses created by reduced consumers and investors' expenses, which means that people have purchased even less and further reduced GDP.
No matter what the causes of the recession are individually, it is clear that the more branches affect, the harder it is to recover. If the recession continues over several quarters and GDP decreases more, it can become a depression. In this scenario, this may take months or Yuši to fully recover, and sometimes the elements used for recovery do not solve the problem completely. The term regeneration without work is often used to discuss the recession or depression that endswithout restoring people to their work.