Growth Recession

Categories: Econ, Metrics

See: Recession.

A growth recession sounds...well, confusing...like a paradox. A growth recession is when the economy is still growing, but really slowly, and unemployment is still rising. Usually, we’d expect to see the economy growing with unemployment low (or dropping), or we’re in a recession and everything is going downhill, including employment.

Economist and professor Solomon Fabricant came up with the term to describe strange periods where we’re kind of in a recession (for at least a few months), but kinda...not.

In real life, growth recessions feel more like recessions than periods of economic expansion, since growth recessions are marked by recession symptoms like growing unemployment, decline in real income, and declines on the firm side of things as well. Yet the economy could still be growing in this scenario when you crunch the macro-numbers. Just growing really, really slowly.

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