Pale Recession

Even economies can look pale, according to ex-Fed Chair Alan Greenspan. Greenspan-the-Man served almost two decades as the Chairman of the Federal Reserve. His long tenure allowed him a lot of time to make a lot of terms, including “pale recession.”

A pale recession is when there’s a clear economic recession, but one that’s hitting certain areas more slowly than others.

This brings us to an economic, philosophical question: what is a recession? Where do we draw the line?

The truth is that there isn’t a hard line. In general, it’s when real GDP goes down, and stays down (or keeps going down) for at least a few months. Usually that’s accompanied by spiking unemployment, lower consumption...all those little macroecon indicators. If any of those indicators is looking well while GDP is looking ill, the whole economy is looking pale.