| Causes of Economic Recession By Kimberly Amadeo, About.com Guide | me |
|---|---|
| Economic recessions are caused by a decline in GDP growth, which is itself caused by a slowdown in manufacturing orders, falling housing prices and sales, and a drop-off in business investment. | Economic recessions are not caused by declines in GDP growth. Recessions are declines in GDP growth. |
| The result of this slowdown is falling employment, and rising unemployment, which causes a slowdown in retail sales. This creates a downward spiral in manufacturing and increased layoffs. | One is left wondering how this downward spiral ever reaches an end. From Kimberly's description, it sounds endless. |
| A stock market decline, known as a bear market, can either be a result of a recession but is often a cause itself. | Either/or, not either/but. Just how little time did they put into this about-dot-com page, anyway? |
| But what usually causes the slowdown in the first place? | Finally! |
| Each recession has its own specific causes, but all of them are usually preceded by a period of irrational exuberance. | Okay... |
This is also known as a business cycle. | So, the business cycle causes recessions? |
Nice takedown.
ReplyDeleteWhat conservatives refuse to recognize is that the business cycle is a cycle.
This cycle does not cause recessions, the cycle is observable because recessions happen.
One might consider the efficacy of Keynesian counter-cyclical activities. In this context it is significant to note that recessions almost exclusivity belong to Republican administrations.
Odd coincidence, that.
JzB
"This cycle does not cause recessions, the cycle is observable because recessions happen."
ReplyDeleteExactly! ...yet, so often missed.
I see that the "Causes of Economic Recession" page was updated on 28 December 2016. Where it formerly said Economic recessions are caused by a decline in GDP growth, it now reads Please note: a decline in GDP growth is a sign that a recession may be underway, but it is rarely a cause.
ReplyDeleteThat is an improvement. But here is the revised paragraph in toto:
Please note: a decline in GDP growth is a sign that a recession may be underway, but it is rarely a cause. That's because GDP is only reported on after the quarter is over. By the time GDP has turned negative, the recession may already be underway.
I'll leave it at that.