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[edit] Vandalism

I reverted this page back to the previous before the Vandalism accrued.

Designer1993 (talk) 17:13, 4 December 2008 (UTC)

[edit] Comment

I'm a little concerned that this article is too focussed on American recessions - the article on "Global recession" is fairly vague. The Japanese/Asian recession in the 1980s/1990s might be a starting point. Obviously America isn't the only country with a pronounced economic cycle. —Preceding unsigned comment added by 123.51.102.122 (talk) 07:28, 4 March 2008 (UTC)


The greatest, worldwide recession that humanity has ever experienced was the Great Depression (late 1920s and 1930s); other notable recessions include the [Oil Crisis]? in the 1970s.

"What about the 1982-1983 recession?"

--The early 1980s recession was from 1981-2, not 1982-3.


But global warming may also lead to ressesion and we need to start recycling. Is that considered just an extension of the 1970s recessions? I consider it to be a full-blown recession in its own right, but I'm a total ignoramus when it comes to economics. I'm also biased because that one hit right when I was entering the labor market. Also, my dad was laid off from a 25 year gig in '82. The memory the early 1980s is bitter for me, as the economic changes specific to labor economics seem more structural than cyclical, and ruthlessly cruel to boot, at least from the perspective of a lamer like me who grew up with mid 20th century American level of expectations, add to this the effects of a mediocre 1970's American K-12 education, and you've probably got me started on something way too editorial even for a Talk: entry in the wikipedia.

this is now partially reflected in the article as Marx's point of view, but of course it's all of labor economics who argues this. Not that there is any serious labor or welfare economics in the wikipedia... its often censored by the "economists" i.e. sociopaths educated only in the neoclassical economics who don't even understand the known limits of the classical OR neoclassical models, and clearly haven't read Smith, Ricardo, Mill, or even Friedman or Lucas.
The most "official" recession dating is done by NBER. Link below. Most of my economic classes used their data for business cycle dating. Problems with them is that they revise ("2nd guess") very often.
link: http://www.nber.org/cycles.html
Based my economic studies, here is what caused past recessions:
  • 1973 : Oil supply shock
  • 1980 + 1981 : Volker engineered recession with monetary policy to lower inflation
  • 1990 : lack of consumer confidence
  • 2001 : over investment
--user:voidvector


The greatest, worldwide recession that humanity has ever experienced was the Great Depression (late 1920s and 1930s); other notable recessions include the [Oil Crisis]? in the 1970s.

Sorry to keep coming back to this, but aside from being American-centric, it is also 20th Century-centric. Can we perhaps agree that the Dark Ages were at least a contender for the title "greatest recession", or that the fall of the Qing (or Ming, or . . . ) Dynasty might be worth thinking about if we really want to say "worldwide"? DOR (HK) (talk) 08:21, 12 June 2008 (UTC)

Could the reason that this is American-centric and 20th-century centric be that the US economy is the largest in the world and that the 20th century is really the only time that detailed data for these sorts of events has been gathered?TheNeutroniumAlchemist (talk) 23:18, 11 January 2009 (UTC)

Since the media, and to at least some extent the econ community seem to agree on a definition of two consecutive quarters of economic shrinkage, it would seem at least theoretically possible to catalog all recessions since the widespread recording of economic statistics.

Yes, but 'economic shrinkage' is itself a term worthy of contention.
GDP and GNP are accepted by NO SERIOUS ECONOMIST as actually indicative of anything but money changing hands - can't tell long from short term trading, can't tell much about long term human capital growth, probably gives negative data on human well-being insofar as we spend money on 'negative products' to keep us safe, from things that we wouldn't have experienced (like pollution) without so much 'economic growth'. The theory of uneconomic growth is all about this... So it is the POLITICIANS that agree on this definition, and the MEDIA... not the real economists. If you can find a single economist who thinks that GDP and GNP are meaningful measures, by all means, name the guy, and cite his rationale for running the money supply based on those numbers. It's just a bad practice that evolved out of fear of doing anything else...
Galbraith material comes from his book "Money: where it came from, where it went" and that's a pretty good source for anyone else who wants to get this. BTW Galbraith devotes CHAPTERS to reserve policy and its politics, so there's no excuse for no separate article on this.

I would like to see seperate articles for the 2001 recession, and the 1991 recession.


When President Franklin D. Roosevelt entered office in 1933, he was intending to continue a relatively conservative fiscal policy to placate his business critics (Herbert Hoover in particular had warned him that any controversial early action would affect business confidence very adversely). However, after Black Monday Roosevelt was forced to change his mind

Was there a four year lag to Roosevelt's reaction?

[edit] Money

I can see what this para is trying to do, but it does it too badly to leave it in. Best start from scratch if we want something along those lines in the article.

"It can be difficult to understand the seeming decrease in available money during a recession when no money is physically destroyed. Suppose you have 250 million people living in a huge hall and there is a recession in the hall, no money went into or left the hall. Where did all the money go? In fact money actually can be destroyed, but it's hard to see where and when. While the amount of "hard" money (also referred to as Central Bank Money) can only be changed within certain restrictions, this is not the total amount of money that an economy relies on. The latter is a multiple of the former, determined by factors like the speed of exchange and the reserve policy of a central bank, or of other banks who borrow from that central bank." Rd232 16:59, 17 Jun 2005 (UTC)

[edit] Redirects

Economic depression and depression (economics) link back to recession. A depression, as far as I know, are not the same as recession. Maybe we should consider ranaming this article. MPS 18:34, 30 January 2006 (UTC)

They're not identical, but they are very similar, and I reckon the one article will probably do for both. The Land 19:35, 30 January 2006 (UTC)
I agree that they belong in the same article, but people like me who are not familiar with the nuances of the subject will assime that a redirect to "recession" means that they are exactly the same. Do we need to define recession versus depression upront? Should we change the artciel name to "economic downturn]] and redirect bothe recession and depression to this main article? MPS 21:21, 30 January 2006 (UTC)
No, people needn't assume they are the same, and the article can distinguish between the two. Exactly what the article is called I'm not that worried, but I see no harm in leaving it as we are. My motivation is that it's better to let one article grow until it needs to be split than to have several which each get less attention and end up worse for it. The Land 13:37, 31 January 2006 (UTC)
My understanding is that a depression is a general and prolonged fall in both prices and output. Say, Japan in much of the 1990s or Hong Kong 1997-2003. DOR (HK) (talk) 08:24, 12 June 2008 (UTC)

[edit] Verbiage in "Causes of recession"

Okay, I'm not an uneducated person, but I must note that this section is cram-packed with enormous, technical words that most "laymen" would not understand, including myself for a few. Is there any chance someone could rewrite some of these more technichal terms so that anyone (such as a junior high-level student writing a report) could understand it? I don't think a young student's report would look too good with words such as "cyclical", "endogenous" and "exogenous" in it. Just my thoughts. --Schmendrick 21:49, 22 August 2006 (UTC)

Just a thought - a young student should never copy directly from Wikipedia, or even use it as a primary source, so such terms wouldn't appear in your report. At worst one should re-write in their own words. Cyclical is pretty obvious. Endogenous vs expogenous change can be simply defined, and I agree that they should be in this case. 82.32.12.167 (talk) 12:54, 5 January 2009 (UTC)

What is verbiage anyhow??

[edit] Depression other than Great Depression?

The "Depression" section only talks about the Great Depression. Can we get info on depression in general, and/or how it relates to recession? --Spoon! 05:28, 8 September 2006 (UTC)

[edit] Depression versus Recession

Each of these topics should have it's own article, they are related but different. MapleTree 11:38, 30 September 2006 (UTC)

Please supply examples to recessions and their causes in the article. —Preceding unsigned comment added by Sandman2007 (talk • contribs) 12:03, 6 December 2007 (UTC)

[edit] possible copyright violations, Great Depression text

I removed several sections from this page. Most of it was because text on the page included passages that seemed to be lifted entirely from [1] and [2], which I'm pretty sure are copyrighted materials (howstuffworks.com has a copyright notice at the bottom of its pages, at the very least) and as such are possible copyright violations. In particular, information about 2 different definitions of what a recession is and information regarding how governments attempt to shift a nation's economy out of a recession was removed.

There was also a lengthy discussion about the Great Depression that was out of place on this page. This has been removed to here, and if anyone wants to place it in the correct location (I suggest merging it into Great Depression if it isn't simply duplicated information from there). It follows:

==The Great Depression (October 1929 to the late 1930s)== {{main|Great Depression}} Prior to the Great Depression in the US, speculative investing in the [[stock market]] occurred, and this created artificially high stock prices. Shares were also used as a partial collateral for loans to buy more stocks (ie. buying stocks on margins as little as 10%). When share prices plummeted, people who had bought on margin were forced to pay their 90% loans used to buy their stocks; to pay their loans, they sold stocks, driving prices down still further in a [[vicious circle]]. Financial institutions -- banks, etc. -- collapsed, triggering a monetary crisis. This analysis has been sharply disputed by [[monetarist]] economists such as [[Milton Friedman]] (dubbing the Great Depression the [[Great Contraction]]) who wrote that the Great Depression would have been merely a "garden-variety recession" if it weren't for the response of the [[Federal Reserve]] to the following [[bank run|runs on the banks]] and that most investments were made unsound by the effects of a massive deflation, the increase in real interest rates and decline of real personal and business incomes. This led to the famous run on the banks, in which massive withdrawals of bank deposits led some banks to collapse, confirming investors' fears and inspiring more withdrawals. From the beginning to end, it has been calculated that the [[money supply]] declined by one third thus forcing down production while prices adjusted. [[John Maynard Keynes]], a famous British economist, believed that the classical business cycle theory broke down when interest rates went below about 2%. People then had no incentive to save money, because they earned so little interest. This meant that banks did not receive money with which they could make loans. The lack of loan money disrupted business, according to Keynes. Keynes also had written a book -- The Economic Consequences of the Peace -- saying that the World War I Allies demanded far too much in reparations from Germany, etc., and that this demand for reparations was at least in part to blame for the lack of trade and economic collapse. Other people often blame very high tariffs, namely the [[Smoot-Hawley Tariff Act|Smoot-Hawley tariffs]] as a cause of the depression. Each country enacted high protectionist tariffs to make imports very expensive; but because all countries did this, that led to a breakdown in international trade. Because trading is good in economics -- people do not trade unless there is a benefit to each side -- a breakdown in trading is bad in economic terms. To date no repetitions of the Great Depression have happened in the industrial world{{Fact|date=March 2007}}. However, many Latin American countries suffered a severe economic slump coupled with high inflation in the 1980s, Japan suffered from a deep recession during the 1990s, and the former [[Communist state]]s of central and eastern Europe also fell into an economic depression during the transition to capitalist economies. Additionally, the term "depression" may be used to describe the situation of many poorer countries in the [[Third World]] (although in many cases these countries never achieved sustained [[economic development]] in the first place).

--BlackAndy (talk) 23:04, 26 January 2008 (UTC)

[edit] Need for real data and examples in economics and financial articles

The theories and the models in this field are approximate explanations. I think they must be supported or illustrated with real data.

I have added several sections to the article, some of them use real data. I hope that will make it easier to the readers to follow what the article is about.

--Chakreshsinghai (talk) 17:25, 27 February 2008 (UTC)

[edit] Use of USA data

One of the editors had complained about the use of recession data from USA.

I agree that the perspective must not be local. However the use of data from USA in this and other articles is appropriate:

  • The USA data is followed and understood most widely.
  • USA economy has the most impact.

However I think the article can use more discussion of the global aspects of recessions. Please help by adding to the section I have started.--Chakreshsinghai (talk) 17:29, 27 February 2008 (UTC)

That statement is subjective - many now turn to China as a guage for the world economy.

[edit] Possibility of a 2007-2008 recession

I think it is unlikely that the recession will be regarded to have started in 2007, since the GDP growth in the last quarter of 2007 was positive, although small. If there is a recession (I am not sure), I would expect its start to be placed in January 2008 or later. I am thinking of deleting 2007 from the heading of the section.--Chakreshsinghai (talk) 18:34, 8 March 2008 (UTC)

Looks like we are almost there. Still if GDP growth is 0.1% this quarter, the two quarter definition will not be satisfied. However if the magnitude of later decline is as deep as some suggest, NBER may mark the beginning in the first quarter.--Chakreshsinghai (talk) 02:59, 19 March 2008 (UTC)
Some folks (TrimTabs) claim having seen the bottom. We'll see.--Chakreshsinghai (talk) 15:17, 2 April 2008 (UTC)
Although it isn't a formal definition, the two-quarters measure is quite common. However, I've never seen a definition of two consecutive quarters of negative growth as measured . . . how? Quarter-to-quarter? Year-on-year? The 1990-91 recession had three quarters of negative growth: Q2 1990 to Q4 1990, on an annualized basis and Q4 1990 to Q2 1991 on a year-on-year basis. It gets worse: the 1982 (Y-Y) recession started in 1981 (Q-Q). The 1980 recession was two (Q-Q), no three (Y-Y) quarters long. DOR (HK) (talk) 02:28, 30 June 2008 (UTC)
The total amount of goods and services produced - known as gross domestic product (GDP) - would have to contract on a quarter by quarter basis for a total period of six months to be considered a recession. —Preceding unsigned comment added by 24.197.249.235 (talk) 06:45, 13 July 2008 (UTC)


[edit] Newbie questions

"Functionally, there is no difference between deficit spending and tax cuts. Both add money to the economy. Every form of money is a form of debt. History shows every depression in American history began with several years of federal surpluses, which removed debt (money) from the economy."

Sorry, new to wiking... I'm unclear who wrote the above. As a lay-reader on this topic, I would really benefit from some further explanation of the above statements, as well as more practical examples. The logic of these statements is not clear in my mind.

Certianly if the statements are true and proven, they would shed some very new and interesting light on the issue for me.

Thank you, J Savory bootmyhead@yahoo.com Jonasavory (talk) 21:04, 10 March 2008 (UTC)

It just plain needs to be sourced, for one thing. Seems to violate NPOV, IMHO. Belgarion89 (talk) 15:55, 13 March 2008 (UTC)
I've removed the paragraph. The last sentence is factually incorrect, and the first two need some qualification to avoid POV issues (and, as Belgarion89 observed, also need to be sourced). Cournot (talk) 22:51, 17 March 2008 (UTC)
Even if you can't properly site the source, could you at least tell us where you found that so those of us who are interested in this most cryptic statement may attempt to locate it ourselves? We may then be able to provide you with the proper reference or attach the reference ourselves. I personally would like to find some clarification of that statement, since it would seem to be an incredible feat of logic, if it can be justified.
As for an interpretation, "Functionally, there is no difference between deficit spending and tax cuts. Both add money to the economy." is a rather biased statement. Without some context to explain why only those two options were listed, it is hard to explain what is meant. Arguably there are differences, at least in that a tax cut is realized immediately by the tax payer, whereas deficit spending involves the collection of taxes, then releasing of the tax money one way or another. In the latter, some time passes, inflation can creep in (or out), the path of the money may hit various bottle-necks or take several detours before making it to a fast-paced, open part of the economy that tax breaks may reach more quickly (or slowly), among other things. It is reasonable, albeit abstract, to say that all forms of money are debt. You can't eat it, hide under it for protection from the elements, or get a foot massage from it. It is paper and stamped metal. The value we assign it determines its worth rather than its usefulness in and of itself. It is basically just an IOU (I owe you) that is given to you by one person, and that other people are very likely to honor and give you something in return for at a later date. It is given to you for something of value, then you can give it to someone else to obtain something of value, so the transaction is fair. Until you spend the money, though, you have this IOU instead of a commodity (goods and services). An IOU is basically a statement of debt, so money could be considered a form of debt in an abstract way. Deficit spending is basically spending more money than you are earning. The government sometimes does this to make up for slow economic times. This way more people and companies are earning money and are more comfortable spending some. The idea is that the government will then be able to tax the new economic activity and recoup its losses while the economy gets moving again. This can backfire if everyone keeps the money the government has spent, causing the government to have economic trouble as well while not helping the economy. It is hard to explain the relationship, but a lot of what makes the economy grow and do well is just having people spending and receiving money. If that slows down, there are problems. This is perhaps an overly simplified answer, but it should give you some idea of what is going on. I encourage you to take a macroeconomics class or find a book on general economics.Random314159 (talk) 06:34, 29 June 2008 (UTC)

[edit] Suspicious Sources

One of the external links for this page is entitled: "Business Cycle Expansions and Contractions, the National Bureau Of Economic Research" but leads instead to what appears to be a commercial site: http://www.exitmundi.nl/oilcrash.htm.

I cannot find the original intended destination for this link in the edit histories because it was changed quite some time ago. This link does need to be repaired, though, because of the importance of the NBER; some users may want to travel to the NBER's site from here. Thanks to whomever can fix this. 132.161.164.17 (talk) 23:40, 5 April 2008 (UTC)

The article entitled "Recession unlikely if US economy gets through next two crucial months" does not seem to meet the requirements for a consensus viewpoint. Also, most of the comments left on the article's page flame the author for holding an unrealistic viewpoint. The article says if we make it through the next two months (it's been almost three) then there won't be a recession. Things are looking more and more like recession all the time. The only real supporters of the ideas in this article are from outsiders in the UK, presenting uninformed arguments in support of the article.

Also, under "Responding to a recession," the Business Journal article that is summarized and used as a source contains phrases such as "Drive out the cancer of waste," possibly referring to employees and "Shoot the wounded," explicitly referring to employees. The summary then omits, "Offer them a [severance] package," leading to an unduly hostile tone toward employees, possibly creating a NPOV issue, especially since the latter omission is an interpretation of the article. It is also interesting to note that firing or "laying off" of employees contributes to unemployment. One of the major indicators of recession is increasing unemployment. So I don't see how firing people would be a logical response to a recession, unless the increase in profitability to the company and price reductions are unrealistically dramatic. Finally, the site that the reference is from is a ".com" which are notorious for biased viewpoints. Since the site caters mainly to executives and managers, it should be scrutinized for NPOV toward employees and third parties anyway. Not to mention, unlike most mainstream entities, Business Journals has no WP entry and the article author's page was deleted for bias/self-promotion, among other things. Random314159 (talk) 17:40, 29 June 2008 (UTC)

I note this article lists China (& India) as countries in recession. May I point out that "In China, the IMF predicts GDP growth for 2008 will be 9.7% and drop to 8.5% in 2009" according to Wikipedia (article on the recession of 2008) To say 9.7% growth is recession is an unusual inaccuracy even by the standrds of other uncorrected inaccuracies I have reported before. Neil Craig

[edit] Is the 2008 "recession" unusual?

I've lived through many recessions, but I don't remember so much of the fear and loathing, not to mention "is it a recession or not?" debate in any of them. The way the media and some people are reacting, it seems as if they've forgotten we had a recession back in 2001, and much of the 80s and 90s were lived under recession and gee, the world didn't come to an end. Where this pertains to this article is whether there is something different about what's going on right now that for some reason sets the current situation apart from past recessions (yes I know it's tied to the subprime thing, but even that shouldn't be generating as much outright fear as it is). Obviously we can't just speculate - so has there been any media discussion as to why people have spent the better part of a year now in fear mode (to the point where it has been said the recession could already be turning around by the time it's finally declared one officially). 68.146.41.232 (talk) 14:49, 22 April 2008 (UTC)

The unbelievable decline in American economic strength not seen since the 1973 OPEC oil embargo or the Great depression of the early 1930's is a result of poor government, altered economics, the decline of middle class prosperity, globalization's impact on the American economy...and yes, our dependency on foreign oil is a major factor of the 2008 economic crisis. Sure, the cost of gas at the pump per gallon remains lower than in Europe and Japan, then other developed countries found alternative energy sources and designed their automobiles' tanks to operate/use less gas than American-build cars with our different emission standards.

I'm only 28 years old and lived through 5 recessions (including my home state: California with the early 1990's California recession was the worst for any U.S. region), while the 1970's had 3 of them in a decade, indicates the U.S. economy is less stable now than in the period from 1946 to 1972 when only 3 recessions took place in a quarter of a century. The byproduct of the so-called "American century" or our own le belle epogue in the 1950's certainly had alot to do with how much and "cheap" the supply of oil is to us in North America. Oil is what made the economic world go around and the less available or more expensive petroleum is to any country, take a look at what happens to them.

I feel the U.S. is in a stage alike post-WWII Britain and the 1980's Soviet Union, the final stage of a global superpower with their imperial, political and economic strength reduced back to its' former size. What makes this an unusual recession involved the rising cost of an important fuel for our cars and factories: oil, a result of less alternative energies, no newly constructed refinery for over 30 years and the War on terror /post 9-11 instability since most of our oil comes from the Persian Gulf. We may hadn't learned from the sticker shock of the 1970's and 80's or the first Gulf war of 1990-91 on the importance and scarcity of oil supplies to American and global economic demand. + 71.102.5.6 (talk) 14:30, 18 June 2008 (UTC)

[edit] U.S. transfer

This is supposed to be an article about recessions in general. Articles about U.S. recession should be transferred to another page about the history of U.S. recessions. The article Possibility of a 2008 recession should be transferred to Economic crisis of 2008. --- 66.81.146.66 (talk) 18:16, 22 April 2008 (UTC)

So transfer it over.--Roxie Yasoxiez (talk) 19:05, 30 April 2008 (UTC)

[edit] Nouriel Roubini scenario

I think his analysis is quite valuable, since it links related events, many of which have actually happend, just as he said they could.

It provides a good explanation of how this recession has progressed, and how it is likley to impact things.

--Chakreshsinghai (talk) 02:23, 22 April 2008 (UTC)

This scenario has been removed by some editors occasionally. I think it provides a good description of what is happing. I believe that his analysis that seemed harsh in February 2008, appears to have been based on careful analysis.

There is a reason for each economic crisis. I think the causes of the causes crisis should be discussed in the article.

--Chakreshsinghai (talk) 16:35, 15 July 2008 (UTC)


In February 2008, Nouriel Roubini suggested a harsh 12-step scenario.[1]. Some of the events he predicted have actually occurred.

  1. U.S. home prices will fall between 20% and 30% from their peak. NYTimes chart
  2. Losses to the financial system from the subprime disaster, as high as $300 billion, are now spreading to near-prime and prime mortgages.
  3. The recession will lead to a sharp increase in defaults on other forms of unsecured consumer debt.
  4. Monoline insurance companies will take losses on their insurance of residential mortgage-backed securities, collateralized debt obligations and other asset-backed securities products, which are much higher than the $10 billion-to-$15 billion rescue package that regulators are trying to arrange.
  5. The commercial real estate loan market will soon enter into a meltdown similar to the subprime one.
  6. Some large regional or even national banks that are very exposed to mortgages, residential and commercial, may go bankrupt. (Bear Stearns Companies, Inc. collapsed on March 16, 2008, and was bought out by JP Morgan Chase.)
  7. Banks' losses will grow as a result of hundreds of billions of dollars of leveraged loans on their balance sheets at values well below par, currently about 90 cents on the dollar.
  8. Once a severe recession starts, a massive wave of corporate defaults will take place. Typically U.S. corporate default rates are about 3.8% (1971-2007); in 2006 and 2007 this figure was a rather low 0.6%. And in a typical U.S. recession such default rates surge above 10%.
  9. The “shadow banking system” (as defined by Pimco, it is composed by non-bank financial institutions that borrow short and in liquid forms and lend or invest long in more illiquid assets), will soon get into serious trouble.
  10. Stock markets in the U.S. and overseas will start pricing in a severe U.S. recession and a sharp global economic slowdown.
  11. The credit crunch that is affecting most credit markets and credit derivative markets will lead to a drying up of liquidity in several financial markets, including otherwise very liquid derivatives markets.
  12. A vicious cycle of losses, capital reduction, credit contraction, forced liquidation of assets at below fundamental prices will ensue, leading to further credit contraction.

[edit] Recession

Dear Peter GREENFINCH:

You write:

comments not about economic recession but just stock market tips by just one person

Nouriel Roubini is a distinguished professor and researcher, and his views have been widely cited in the context of the current down-turn.

See Google search [3]


--Chakreshsinghai (talk) 01:22, 18 July 2008 (UTC)

I know that, but it is only one person, from one country, giving one advice and wikipedia deals with facts and notions, not with predictions by celebrities. I might even share to a large extent his analysis, although I find it a bit simplistic, as is the case for any monoscenario, and missing a few factors. Btw, the article is overfocused on the US situation. I know the US is the source of the mess, but the article topic is not "recession in the US". --Pgreenfinch (talk) 07:52, 18 July 2008 (UTC)

Peter,

Nouriel Roubini is not a celebrity. He is an acknowledged expert. Globally acknowledged expert. He is a researcher and has worked hard to be an expert. His analysis identifies some of the key developments in the present crisis.

It would be nice to see more details on the global recession(s). I had added some things, but no one else has contributed anything significant on it.

Truth is, whether you like it or not, USA is the global economic center. Textbooks written in USA are used worldwide. I would like to see someone contribute that will explore the global linkages.

Certainly this crisis has its origin in the USA, as you acknowledge it.

--Chakreshsinghai (talk) 18:05, 18 July 2008 (UTC)

[edit] Nourini/ Recession: Abridged presentation of my opinion

The comments attributed to Nouriel Roubini seems to me clearly out of topic.

  • However smart, hard working and famous is that person, it is only one expert, from one country, giving one advice and one scenario, so it cannot be considered as a neutral explanation of a recession.
  • It is not an explanation, actually, but a prediction, without much attempt at justifying it. An encyclopedy does not deal with predictions (personnally I share some of Roubini's views, but their place is in a blog or a newspaper comment page). Also, as is the case for any monoscenario, it misses a few factors, even on financial aspects (for example, what about the current Treasury bonds bubble?).
  • What is worse, is that the scenario focuses quasi exclusively on those financial aspects. Most key economic aspects are missing: currency rates and monetary policies, interest rates, inflation, foreign trade effects (what unbalances?) and policies (protectionist temptations?), unemployment, standards of living, level of production / consumption / capital spending (GDP components), public budgets... In fact it is not really a paper about recession.
  • Also, the article is overfocused on the US situation. I know the US is highly responsible for the situation, but the article topic is not "recession (or financial crisis) in the US".

Conclusion: better take out a so called analysis that gives the dubious impression that Roubini has a very narrow idea of what is a recession and does not show interest in its global aspects (which are decisive, even for the US, in a globalized economy).

Partly retrieved from "http://en.wikipedia.org/wiki/User_talk:Pgreenfinch" --Pgreenfinch (talk) 08:02, 20 July 2008 (UTC)

I know about the credentials of Nouriel Roubini, a distinguished researcher. I don't know about Pgreenfinch except his website and yahoo groups. Peter Greenfinch, who I believe is a consultant, calls Roubini's views "just stock market tips by just one person"
It appears to me that Peter Greenfinch is confident of his personal views. I request him not to remove Nouriel Roubini's views.
--Chakreshsinghai (talk) 00:51, 23 July 2008 (UTC)
The debate is not about me, but thanks, Chakreshsinghai, to give me that importance ;-). My observations are humbler, I just see the inclusion as OT. --Pgreenfinch (talk) 08:43, 23 July 2008 (UTC)

[edit] Theories about recession

Should a "Theories" section be useful in the article ? I suggest presenting the main theories, i.e. the explanation of the fact that economies can go into recession, and the solutions proposed by each economic thought to recover:

  • neoclassical economists: recession is always a temporary phenomenon due (cf. Say Law) to an external cause (as opposed to the market). If prices and wages are flexible, if the labor market is deregulated, is compettion is respected, all crisis is impossible. Consequently, recession is always due to an excessive interventio of the State in the economy: minimal wage, bad monetary policy (cf. Friedmann), prevented redundancies, etc. The solution would be to set free the market's forces (the State must pull out of the economy).
  • keynesians: recession can be due to 1)pessimistic anticipations by companies, so that they prefer not to invest 2)external shocks, above all in open economies, because inflation in some countries can be generalized in the world, causing a fall in incomes, and in output. The solution is the intervention of the State (because it is the only which can bring back confidence by investing). Neoclassical solution worsen the recession, because they reduce agregate demand (so that companies will invest even less).
  • schumpeterians: the recession, as a transition between two technological systems (cf.Freeman) is inevitable. It is part of the destructive creation process.

I am not ready to draft this section, because I lack economic knowledge, I am still learning English and I am a beginning editor. I prefer to let the work to a more experienced editor. --Pah777 (talk) 15:09, 5 October 2008 (UTC)

This sounds like a good idea. Do you have a source for these three theories and what you've written? NJGW (talk) 16:13, 5 October 2008 (UTC)

I have found some references on the web:

  • The Keynesian Revolution
  • Recession Prevention: Keynes Was Right
  • Keynesian models of recession and depression
  • Fiscal and Monetary Policy Process "the Classical Theory of economics promised that the economy would self-correct if government did not interfere. John Maynard Keynes developed Keynesian Theory, which called for government intervention to correct economic instability. One of the most important functions of our government today is to try to correct inflation and recession in our economy."
  • Keynesian school "The Classical view assumed that in a recession, wages and prices would decline to restore full employment. Keynes held that the opposite was true. Falling prices and wages, by depressing people's incomes, would prevent a revival of spending. He insisted that direct government intervention was necessary to increase total spending."
  • A review of Keynesian theory "Keynes explanations of slumps ran something like this: (...) The cure for this, Keynes said, was for the central bank to expand the money supply. By putting more bills in people's hands, consumer confidence would return, people would spend, and the circular flow of money would be reestablished. Keynes believed that depressions were recessions that had fallen into a "liquidity trap." A liquidity trap is when people hoard money and refuse to spend no matter how much the government tries to expand the money supply. In these dire circumstances, Keynes believed that the government should do what individuals were not, namely, spend. In his memorable phrase, Keynes called this "priming the pump" of the economy, a final government effort to reestablish the circular flow of money."

For Schumpeter, we can take the link already cited in the article Schumpeter.--Pah777 (talk) 19:50, 5 October 2008 (UTC)

[edit] Two Quarters definition

Simple question: in the popular definition of a recession as two consecutive quarters of contraction, is that supposed to be year-on-year contraction, or quarter-to-quarter, annualized? Never did figure that one out ! DOR (HK) (talk) 03:46, 6 October 2008 (UTC)

Quarter-on-quarter afaik. Doesn't matter if you annualise it or not - GDP decline is GDP decline. Here's an interesting take (from the reflist). Zain Ebrahim (talk) 12:01, 6 October 2008 (UTC)
Hmm. I've never seen quarter-to-quarter GDP data that wasn't annualized. Not sure I agree with that. DOR (HK) (talk) 03:08, 9 October 2008 (UTC)
Well, sure - they always annualise it but if you annualise a negative rate you get a bigger negative rate. So according to the definition "two consecutive quarters of contraction", all you need is GDP decline and you've got a recession - no need to annualise the rate of decline for this purpose. Zain Ebrahim (talk) 13:38, 13 October 2008 (UTC)

[edit] Needs updating

It does now seem quite likely that there will be a recession. Incidentally the analysis by Nouriel Roubini was right. It told us clearly why there will be a financial crisis.--Chakreshsinghai (talk) 00:34, 9 October 2008 (UTC)

We need a table with GDP data.--Chakreshsinghai (talk) 23:19, 20 October 2008 (UTC)

US real GDP rose in both of the first two quarters of this year. Domestic Demand, however, fell. DOR (HK) (talk) 05:31, 22 October 2008 (UTC)

The definition of recession given in the main article, two consecutive quarters of negative growth in real GDP, is a folk lore type definition and is widely off the mark with the real economy. The official arbiter of recession in USA is National Board of Economic Research. The folk lore type definition of recession for the current recession is confirmed only when the 4-th quarter of 2008 GDP data becomes available at the end of January of 2009, and put the beginning of this recession at the third quarter of 2008. The National Board of Economic Research has announced in early December of 2008 that this recession has begun in December of 2007. Further more according to the folk lore type definition in the main article, the 2000-2001 recession is not a recession at all since there were no two consecutive negative growth quarters in real GDP during that time period. Of course, that was a legitimate recession considering all aspects of economic pains inflicted on the society, and The National Board of Economic Research classified that as a recession, too. However, the declarations of The National Board of Economic Research has some problem. Its declaration is based on the majority vote of 11 prominent economists, so lacks a predefined criteria. We have looked into this problem, and have found that the following procedure will create a satisfactory definition of recessions close to the declaration of the Board: Take year-to-year comparison of real GDP. When that number drops below +1.0%, consider a recession has started 2 quarters back. When that number moves above +1.0%, consider the recession has ended 2 quarters back. According to this standard, the current recession has started in the first quarter of 2008, and is, of course, continuing. To see our analysis, please visit article 12 on our website forcastglobaleconomy.com. Real GDP data are published by The Bureau of Economic Analysis on its website when official statistics becomes available. Eforecast (talk) 16:18, 4 February 2009 (UTC)

[edit] Global Recession

I had expanded this article during Feb 2008 to April 2008 ([4].

There was a comment that the perspective given was US-centric.

Since one one has attempted to add a global perspective, I am starting an article Global Recession. I expect to be a reasonable article in 3-6 months.--Chakreshsinghai (talk) 05:40, 17 November 2008 (UTC)

[edit] Prevention and Way Out

I am not a financial expert, but used to observe the world with my limited knowledge. I feel it is worth to put forward my thoughts regarding prevention of recession in future as well as on a way out from 2008 recession, which is gripping the world at the time of writing this.

Basically, if we see the bottom line, avoiding all the financial terms, recession is the result of financial credibility loss. The financial world is driven by the fight for the survival and the fittest emerges as winners. As a result of this the wealth gets accumulated in limited points, even though regulatory authorities and taxation are in place. When the economy take measures like job cuts to save individual players or units to survive, it indirectly pumps more distrust and reduces the purchasing power of more people; in-turn adding more to the credibility loss.

It seems once the economy is recovered we can be more preventive. Governing bodies and/or regulators should be more vigil on the purchase power of common public. They should be more supportive, both for helping more people to attain purchasing power and for retaining the purchasing power once it is reached. This can be either by social security measures, or by automatic acquisition of a fixed percentage of shares of profit making institutions, if it controls a considerable meaningful amount of assets to the financial system, specifically for generating more jobs and supporting individuals with income below some bench marks.

It will be better to have little slowdown in profit making at good times to create a society with more purchasing power around than getting in to trouble in cycles (naming it as a cyclic unavoidable phenomenon to escape from the responsibility of tackling it!). Rather than terming such initiatives as protectionist/socialist and discarding such options, such inclusiveness will bring more continuality to the system.

Prevention is better than cure. A stitch in time saves nine. Planting a tree at good times will return its fruits at bad times (a Malayalam proverb; sampathu kalathu ka pathu nattal, aapathu kalathu ka pathu thinnam, means, If in good times 10 seeds are planted , at bad times 10 fruits can be eaten). Our world have a lot of proverbs/lessons to guide us, let us be optimistic.

While the world is going through an economic slowdown, the governing bodies should invest in the customers than investing in the producers/suppliers. It is being understood that suppliers are not able to create their respective customers, or failed to create a purchasing community for their products/services. So the immediate action of the states/authorities is to enable more people with financial security and thus providing them a mind set to involve in more purchases than financially aiding big corporate houses, which have accepted their failure in anticipating and/or preventing a meltdown. Right action can give right signals, right signals can bring joyful results. —Preceding unsigned comment added by Adeeb.in (talk • contribs) 09:02, 18 November 2008 (UTC)

[edit] Unclear comment

The article currently states:

"Recessions are the result of . . . rising prices and stagnant economic growth (stagflation)"

Earlier in the article we say falling growth and here we say stagnant growth. This is not good. I'll wait a while for some comments then I'll remove the end of that sentence. I think a link to stagflation in See also is sufficient. Zain Ebrahim (talk) 20:18, 19 November 2008 (UTC)

I'm with you--take it out. CRETOG8(t/c) 20:43, 19 November 2008 (UTC)

Well, here in Hong Kong (and up in Japan) our last recession coincided with deeply falling prices, so I'm not so sure any part of the statement is accurate.DOR (HK) (talk) 05:03, 20 November 2008 (UTC)

Thanks, both. It's been 5 days an no one else responded so I'll assume this is concensus. I went ahead and removed that sentence. Zain Ebrahim (talk) 12:47, 24 November 2008 (UTC)

[edit] recession.org

The recession.org site looks to me like a very diligently run, but not particularly authoritative source. I don't think it qualifies under wp:rs, so I'm going to pull it out, but feel free to argue the point here or at the Reliable sources discussions. CRETOG8(t/c) 04:57, 21 December 2008 (UTC)

I've revised downward my opinion of recession.org, since it appears that this which was linked in the article, is simply pasted from this, with attribution, but still... CRETOG8(t/c) 05:03, 21 December 2008 (UTC)
...and this is a copy of this without attribution. CRETOG8(t/c) 05:13, 21 December 2008 (UTC)

I added this link and have watched this site over the past 8 months and it is a good source of information esp for those looking to get easy answers. The articles are well written though some of them are not unique to the site ( I am surprised that isn't sourced though, their is usually an author field under the date ) I find it well updated and pass it along to people so I figured it would be a good source to those browsing wiki funny thing is this page is where I originally FOUND the site it several months ago in the external links. They also have a very active economics forum. This external link[5] on the other hand looks like it holds no real content and should have been removed over recession.org in my opinion.Dollarbills (talk) 07:23, 21 December 2008 (UTC)

You're right about that latter site, I pulled that link out as well. It's good that you find any site useful to you, but for WP, I don't think it cuts it. If you find something there which you think should go into a WP article, then tracking down the original is a better way to go. CRETOG8(t/c) 07:29, 21 December 2008 (UTC)

[edit] origin of two quarters definition

i believe this definition was invented by a US administration (perhaps LBJ's) for the purposes of political spin, but can't find a source--Mongreilf (talk) 06:29, 23 December 2008 (UTC)

I added some references for the origin of this definition last year, but they have been removed. I'll see if I can retrieve them. I did quite a bit of research on this (which is why it is a shame it has disappeared from this page altogether). The answer is that the two quarters definition was one of several rules of thumb that a recession is occurring, published in the late 50s. Various newspapers picked this up as the easiest to quantify, dropping all the other rules of thumb. Since then this seems to have been adopted by many official organisations and authorities, so even though as a definition it is rather flawed, it is now so ubiquitous that the concept of a recession is tied to the two quarters rule of thumb. 82.32.12.167 (talk) 12:51, 5 January 2009 (UTC)

[edit] Populist suggestion for steering economy out of recession

I don't know much about populist economics, but reading this certainly didn't help:

"Populist economists may suggest that benefits for consumers, in the form of subsidies given to companies it helps them to manage the prices at consumer favour so that the demand thereby consumption of individuals can increase or lower-bracket tax reductions which increases the disposal income of individuals and in case of companies it again helps in managing attractive prices, are more effective and serve a double purpose including relieving the suffering caused by a recession"

--212.104.156.41 (talk) 17:50, 6 January 2009 (UTC)

Wow, you're right. That was awful. Since it's also unreferenced, I pulled it out. CRETOG8(t/c) 17:58, 6 January 2009 (UTC)

[edit] Australia not in a "technical recession"

There's been a lot of hoop-la lately about how, contrary to all predictions, Australia is the only OECD nation not in a recession. That's how the government put it, and it seems simple enough: either a country is in a recession, or it's not. It comes directly from the widely accepted definition of "recession". However, ever since, everyone's been talking about how Australia's not in a "technical recession". The subtext seems to be "Well, we really are in a recession, and everyone knows it, but just not in a recession according to the definition of 'recession' ". If that's the case, just what precisely is the "real" definition of recession that nobody has spelled out but everyone seems to agree on? -- JackofOz (talk) 03:22, 10 June 2009 (UTC)

“. . . the recession, broadly defined as a period in which there is some fall in the level of the indicator of economic activity (or rise in the case of the unemployment rate).” --Reserve Bank of Australia (http://www.rba.gov.au/PublicationsAndResearch/StatementsOnMonetaryPolicy/Boxes/1997/1997_05_1_box.pdf) DOR (HK) (talk) 04:30, 11 June 2009 (UTC)

Thanks. So, why does the Reserve Bank use that broad definition, when the government and others use a more precise definition: "Two quarters of negative growth"? -- JackofOz (talk) 08:26, 11 June 2009 (UTC)
For the same reason newspaper articles have headlines: to get the gist of the message across, quickly and in a way that is easily understood, but not necessarily in full accuracy. DOR (HK) (talk) 07:12, 12 June 2009 (UTC)
I havn't checked it but isn't that publication really old? What does the Australian Reserve Bank base its policy decisions on? If it's growth, surely they would use a more precise definition of recession. If the only purpose of the definition is to communicate to a lay audience, anyone would use a broad definition. Zain Ebrahim (talk) 08:40, 12 June 2009 (UTC)
DOR, that's the exact point I'm getting at. Just what is the gist of the message in this case? If those who use the term "technical recession" (in the sense of acknowleding Australia's not in one) are referring to generally difficult and challenging economic conditions, then by that frame of reference we could be said to be in a "non-technical recession" virtually 100% of the time, because times have been tough, one way or another, since Adam was a boy. But surely it can't be as broad as that. They must be referring to some specific condition or combination of conditions that, implicitly, constitutes this unspoken "non-technical recession". Or is it just a case of monkey-hear-monkey-do: one journo says "Australia's not in a technical recession", and all the others just tag along because it's become the trendy thing to say at the moment? Or am I making too much of this, and is it perhaps simply a case of superfluous, redundant, unnecessary, tautological wording, something that journos are not entirely unfamiliar with? -- JackofOz (talk) 11:44, 12 June 2009 (UTC)
In my experience, the use of the term "technical recession" is almost always because there does not yet exist data showing two subsequent quarters of contraction (although, whether should that be Q-Q or year-on-year has never been clear). And, I believe governments use a very general description ("broad weakness" or "widespread loss of momentum") as their official definitions. Bottom line is there is no one definition across jurisdictions, and newspapers don't bother to understand that. DOR (HK) (talk) 10:20, 14 June 2009 (UTC)
Right. Bottom line is that if one uses the word "technical" in relation to recession, one should make it clear exactly which definition one's referring to, because there's more than one. I should add that I'm not an economist's bootlace, I'm just trying to understand just exactly what it is that they're talking about. It seems, as ever, that economics is far from an exact science, and words mean whatever the speaker wants them to mean. Thanks for your forbearance. -- JackofOz (talk) 22:49, 14 June 2009 (UTC)


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