A recession is a period of negative economic growth for 2 consecutive quarters. There are fears that the US economy is heading towards recession in either 2007 or 2008. See: US economy Recession?
There are various factors that determine the length of a recession. These include:
- Effectiveness of Monetary and Fiscal Policy
- Effect on Consumer Confidence
- Response of the Government.
- What Causes Recession, is it Demand side shock, supply side shock, or a combination of both.
- How flexible are Labour Markets?
- Will increased Government spending lead to crowding out.