Search

Is recession the opposite of inflation?

Abbreviated Question: 
Is recession the opposite of inflation?
Answer: 

A recession is a period of general economic decline, a contraction in the GDP for six months (two consecutive quarters) or longer. In that sense, they represent negative growth.

Why is the growth of GDP so important?

Abbreviated Question: 
Why is the growth of GDP so important?
Answer: 

The event that you are referring to is what economists call recessions. During recessions, GDP drops or grows significantly below normal times for a period of usually less than two years. Recessions are dreaded by many but not all economists. Robert Lucas, a Nobel Prize winner, questioned long ago the idea that short term economic fluctuations are really costly to society. He suggested that the public may not be willing to pay much, say in terms of higher taxes, to get rid of economic fluctuations.