Definition
A period of declining economic output, generally identified by negative economic growth in two successive quarters.
Example
If the gross domestic product (GDP) of a country declines for two consecutive quarters (two three month periods) for whatever reasons, the economy of this country is said to be in a recession.
Relevance
Even though recessions are not a pleasant experience for most economic actors, they are an essential part of the business cycle. However, policy makers may influence the duration and severity of a recession by taking appropriate measures at the right time.
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