Recessions: Causes and Effects

A recession can be described as a significant, widespread, and sustained contraction in economic activity. Typically, a decline in Gross Domestic Product (GDP) for two consecutive quarters is considered an indication of recession. It is a period of economic slowdown characterized by a significant drop in various aspects of economic activity, including employment, income, consumer spending, stock prices, business profits, oil prices, investment, and interest rates. The impact of recessions can be severe, leading to higher unemployment, reduced productivity, and lower economic output, which ultimately has a negative impact on society as a whole.