But it might surprise that the pace of recovery from this global financial crisis will vary from country to country – and even from person to person.
Growth and the recession
There is no single definition of what makes a recession. But a popular measure is two quarters of negative gross domestic product ( GDP) back-to-back. Under this definition, a recovery officially begins when GDP growth returns. GDP might slow because demand for goods and services drop, spending and production is cut and, as a result, jobs are lost. When the economy is stimulated again, the measures tend to rise.
In addition to this widespread definition of a recession, broader definitions of a recession are arguably rising in popularity.
The influential National Bureau of Economic Research ( NBER) says, for example, a recession is “a significant decline in activity spread across the economy, lasting more than a few months, normally visible in real GDP, real income, employment, industrial production, and wholesale-retail sales”. This broader definition is backwards looking, waiting until “sufficient data are able to avoid the need for major revisions”.
A recession is less severe than a depression
In economic terms, a recession and a depression are both periods of slowdown. But a depression – such as the Great Depression of the 1930s – is considered to be more severe than a recession.
Some will recover more quickly
It is relatively common for countries or regions to go into recession from time to time – and the global financial crisis, the most recent recession, was notable for the large number of countries involved at one time. Despite the shared timing, the experience of recession varied from nation to nation. In the United States, it started in 2007 and officially came to an end 18 months later, figures show, making it the country’s longest recession since World War II. In Europe, this recession was calculated to have started in the first quarter of 2008 and ended in the second quarter of 2009 – a different timescale to that seen in the United States. Even within Europe, there has been much variation in the economic fortunes of individual countries, with Germany seen as a powerhouse by many while peripheral nations such as Ireland, Spain and Greece struggled. In contrast, recession effects were short-lived in much of Asia and many countries in the region did not experience a recession at all.
My recession is different to your recession
Just as countries can come in and out of recessions at different paces depending on circumstances, so can individuals. It takes time for an economy to return to full strength and for employment to return to pre-recession levels. Many people will not have noticed the official end of the recession as a turning point in their daily life. Those living in a hard hit area or working in an industry that shed a large number or jobs are particularly vulnerable to longer recoveries.
So while the word recession is frequently uttered in a shared sense, it seems it can still mean different things to different people.