welcome to watchmojo.com I’m your host –
non-carbon soutien and today we
discussed the dreaded R word recession
now recession is basically any downward
trend in the business cycle which
usually leads to a decline in production
and employment and that usually leads to
lower income for households which means
that they consume less can turn then
creates a vicious cycle where companies
produce less now the way economists
measure whether or not we are in a
recession is that they look for two
consecutive quarters with negative GDP
growth now sometimes they don’t even
look for two consecutive back-to-back
quarters they just look for two quarters
in a given year and that’s enough to
trigger the fear of a recession now the
term fear is very important here because
recessions usually have an important
psychological factor if you think that
the economy is going to slow down you’re
not going to be consuming as much and
that means that companies aren’t selling
as many goods and in turn what happens
is that they need to produce less and
thus hire less people it basically
becomes a downward vicious cycle now you
may be asking what are some of the
causes of a recession well those include
speculation national debt inflation
devalued currency and the use of
derivatives which sometimes can get out
of hand and some of the effects well
there are pretty much bad signs such as
unemployment foreclosures bankruptcies
banks aren’t lending as much money stock
market takes an ailing and ultimately
all this leads to inflation so you’re
now in the recession that sucks what do
you do to get out of it
there are many schools of thought and
they’re basically different but all of
them try to accomplish the same thing
which is getting back on the road to
recovery the first one is the Keynesian
school of thought which basically
advocates deficit spending that way the
government basically invests and sparks
economic growth the second one is the
supply side economic belief that says
you need to cut taxes to get businesses
to invest higher and if they do that
then basically consumers have more money
in their wallets to kick-start the
economy again and the third one is
actually the one that is the most
capitalistic one which basically is
let’s say fair capitalism just let it be
let the market correct itself what the
markets invisible hand come in and do
what it needs to do
you
non-carbon soutien and today we
discussed the dreaded R word recession
now recession is basically any downward
trend in the business cycle which
usually leads to a decline in production
and employment and that usually leads to
lower income for households which means
that they consume less can turn then
creates a vicious cycle where companies
produce less now the way economists
measure whether or not we are in a
recession is that they look for two
consecutive quarters with negative GDP
growth now sometimes they don’t even
look for two consecutive back-to-back
quarters they just look for two quarters
in a given year and that’s enough to
trigger the fear of a recession now the
term fear is very important here because
recessions usually have an important
psychological factor if you think that
the economy is going to slow down you’re
not going to be consuming as much and
that means that companies aren’t selling
as many goods and in turn what happens
is that they need to produce less and
thus hire less people it basically
becomes a downward vicious cycle now you
may be asking what are some of the
causes of a recession well those include
speculation national debt inflation
devalued currency and the use of
derivatives which sometimes can get out
of hand and some of the effects well
there are pretty much bad signs such as
unemployment foreclosures bankruptcies
banks aren’t lending as much money stock
market takes an ailing and ultimately
all this leads to inflation so you’re
now in the recession that sucks what do
you do to get out of it
there are many schools of thought and
they’re basically different but all of
them try to accomplish the same thing
which is getting back on the road to
recovery the first one is the Keynesian
school of thought which basically
advocates deficit spending that way the
government basically invests and sparks
economic growth the second one is the
supply side economic belief that says
you need to cut taxes to get businesses
to invest higher and if they do that
then basically consumers have more money
in their wallets to kick-start the
economy again and the third one is
actually the one that is the most
capitalistic one which basically is
let’s say fair capitalism just let it be
let the market correct itself what the
markets invisible hand come in and do
what it needs to do
you
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