What are the effects of recession?

Most economists suggest that the primary impasse of recession are declining stock markets, loss of personal wealth and overall slowdown in economic growth. These three main factors suggest that many other effects are soon followed. These would usually include increasing unemployment, falling values ​​of real estate and growing government deficits. Another effect that some economists say can be good, the decrease in inflation. When prices continue to rise, but wage increases follow, it can be one of the causes of the recession. After the economy has entered into a decline, people usually do not buy so many products and, as a result, prices usually start. However, experts warn that too steep prices can lead to deflation, which can lead to a situation where Actally prices are less than the costs associated with their production. When the economy enters the deflation phase, it can be difficult to reverse and can have long -term effects.

Statistics seem to indicate that one of the most weakening recession effects is the rise in unemployment. On a personal level, the loss of employment may have harmful impacts - psychological and financial - on people's lives. Prolonged unemployment may have the potential to worsen further effects of recession or even prolong the time during which the economic decline could withstand. When people are unemployed, it tends to have a domino effect on the economies because it leaves people less one -off income; Therefore, they generally spend less money. Having consumers who are willing to freely spend their money freely is often considered a necessary need to reverse the effects of recession.

Some contries offer government programs aimed at reducing the impact of recession. These programs may include unemployment, food supplements and housing, and unemployed retraining programs. The cost of these programs can often lead to budget deficits in the government because during the recession of the government usualKle suffers from a shrinking tax base.

One of the first effects of the recession is usually a decrease in the value of the shares. Similarly, stock markets sometimes regain stability from other indicators. Although stocks usually begin to recover when companies start hiring, in some cases markets can increase before work. This type of situation is what economists generally refer to as recovery without work.