Recession Proof

  

Categories: Econ

Drug companies. (Legal ones. Well, actually...illegal ones, too.) Cable companies. Grocery stores. All the things people simply can't live without, almost literally.

Recession is sequential declines in GDP growth. The economy is sucking. People don't want to spend. They save their extra dough. They're afraid. But that headache medicine? Yeah, they'd rather do without the new winter jacket and be able to have the pills. And the downloading of, um, art films from the internet? Yeah. Teens would have that ahead of ramen noodles. Those are almost guaranteed recession-proof industries.

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Finance: What is Recession?15 Views

00:00

finance a la shmoop what is recession well here's one here's another and

00:08

another and well here's an economic recession so technically when GDP [Set of teeth appear]

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declines for two sequential quarters that is a recession and you can glean

00:18

enough from this most excellent chart that in most years GDP grows not

00:23

massively but relatively steadily and with compounding the US has grown GDP

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from a trickle to a torrent in a recession economic activity declines [Recession definition appears]

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maybe a half a percent a percent maybe two percent and you might not think

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that's a big deal but we're a nation living on credit that is plastic these [Man using credit card]

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things mortgages car loans bunch of other credit II kind of things so a

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decline of even 1% when we were expecting growth of two is a delta of 3%

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and that change is exacerbated with leverage when people fear for their job

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safety they stop buying those extra pairs of earrings at the mall they get [Woman biting her nails]

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one less tattoo and they stop making appointments at Botox Depot so all of

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the sudden activity in given quote luxury sectors or otherwise unquote just [Person receiving a tattoo]

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stops dead and there's a multiplier effect here as well because a wealthy

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banker who used to throw 20 parties a year now only throws four so all those [Calendar displaying party days appears]

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bartenders and oboe players and ice sculptors yeah they're all out of work

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as well and then they buy less beer and that new ice pick the sculptor was gonna

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buy yeah well she'll just sharpen her own and make do with it you know until

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the GDP grows again after the recession is over in a few years so yeah [Boom/bust cycle appears]

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recessions they're dangerous and credit high credit makes them all the more

01:45

dangerous so be wary

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