2. What is a Recession?
A recession is a negative economic growth for two or
more consecutive quarters
General slow down in economic activity
Recessions generally occur when there is a
widespread drop in spending
Solution: government should spend more while the
private sector is spending less, the support of
employment while those debts are paid down is
crucial
3. The severity and impact depends on how vulnerable
and exposed the respective economies have been
with the US economy
The National Bureau of Economic Research, or
NBER, is considered the official arbiter of recessions
The last recession ran from March 2001 through
November 2001
21 recessions in the 20th century
4. “Years ago people who sacrificed their sleep, family,
food, laughter and other joys of life were called
„Soldiers‟ but today they are called „Shareholders‟”
5. Impact of Recession
1. Unemployment
2. Fall in productivity
3. Opportunities for anti-competitive mergers
Example; the suspension of ’competition policy’ in
the United States in the 1930s may have extended
the Great Depression
4. People dependant on wages and salaries are more
affected than those who rely on fixed income o
welfare or benefits
5. Negative impact on health and well-being of people
6. Psychological Impact of Recession
“The psychological downturn, especially when
combined with the current economic recession, is far
worse than the 2001 economic slowdown, and its
cause is not explained by outside factors like media
bias or bickering between impotent “leaders.” This
sense of pessimism is rooted in the profound and
sustained feelings of vulnerability that many people
are experiencing. Anxiety, depression, and a sense
of being powerless are a poisonous mix. The tragedy
is that focusing on fears only reinforces them. In
understandable but irrational ways, people who are
frightened move ever forward toward panic. In this
way, a psychological recession is self-fulfilling.” –
Judith Bardwick
7. A growing sense of frustration, uncertainty,
disappointment, and ineffectiveness, often described
as a sense of losing control.
Increasing tiredness, confusion, and malaise, feeling
punchdrunk with too many problems to solve.
A feeling of personal isolation from family and friends
at home and work.
A sense of inadequacy in family life due to lack of
time/money to maintain former lifestyles.
A personal dilemma between the temptation to quit
or give in to despair, and the courage or “bottle” it
takes to hang on and keep trying.
8. No motivation or incentive to work
Less efficiency in the quality of work
