Slowdown in US Economy
In 2007, the American economy began to slow significantly, mostly because of a real-estate slump and related financial problems. Many economists believe that the economy entered a recession at the end of 2007 or early in 2008. A committee of academic economists, overseen by the National Bureau of Economic Research, makes the most commonly cited determination about when recessions begin and end. Because the committee defines a recession as a broad-based and protracted downturn in economic activity, its members typically wait many months before announcing that the economy has entered a recession. They have made no such announcement lately. Instead, recent economic indicators point to the possibility of stagflation - a slowdown in economic activity combined with rising prices not seen since the 1970s.
Herewith, I am giving some of the important economic terminologies for the understanding of the readers:
- Recession: Some economists define recession to be a period of two successive quarters of negative GDP (Gross Domestic Product) growth. But this is not universally accepted. The US national Bureau of Economic Research defines a recession as “a significant decline in economic activity spread across the economy, lasting more than a few months”. A recession, it says, may involve simultaneous decline in measures of overall economic activity like employment, investment, and corporate profits.
- Depression: A severe or long Recession.
- Stagflation: A period of time characterized by high inflation and recessionary conditions. It is an economic condition of both continuing inflation and stagnant business
activity. Stagflation is a period of slow economic growth and high unemployment(stagnation) while prices rise (inflation).
- Gross Domestic Product: The gross domestic product (GDP) or gross domestic income (GDI) is one of the measures of national income and output for a given country's economy. GDP is defined as the total market value of all final goods and services produced within the country in a given period of time (usually a calendar year).