Recession, Depression, Inflation, Stagnation?: Economics Concepts Which Matter

The public is, often, bombarded with, a spread of economic terms, which, often, rather than helping the untrained, better understand, merely confuses them. How often have we heard, terms, such as, recession, depression, inflation, stagnation, etc, but, many, have only a limited understanding, of what that means? As, a former, licensed, representative, and principal, for a financial services company, I even have learned, and developed, an understanding, and appreciation, for what these mean, and their potential impacts. Often, I attempt to make others, feel easier , by joking, that the difference, between, a recession and a depression, is, it’s the previous , when it happens, to you, but, the latter, once I am affected! thereupon in mind, this text will plan to , briefly, consider, examine, review, and discuss, these four concepts/ principles, and what they mean, and represent.

1. Recession: A recession is, generally, defined, as a period, of temporary economic/ financial decline, when, trade, industrial activities, and other economic indicators, are identified, in, at least, two consecutive quarters. it’s usually reviewed, in terms of, the Gross Domestic Product, or, GDP, which measures, overall economic performance, during a specific nation. Often, the Federal Reserve System Bank, uses several tools/ methods, to aim to reinforce activity, including reducing interest rates, etc.

2. Depression: When, the recession, becomes, even more severe, and endures, for a significantly, extended period of your time , it’s often, considered, a depression. we’d witness, either, a selected component of the economy, which is depressed, like housing, or industry – specific, or, an overall one. Nearly, everyone, is familiar, with the amount , which began in 1929, and extended, for several years, which is mentioned , as, the good Depression.

3. Inflation: Inflation is that the rate at which, a selected (or several) currency, falls, and, results, in an overall, rise in most prices of products, and services. the standard pattern, of the Federal Reserve System Bank, is, to extend the prices , of borrowing money, also mentioned , as interest rates. In most cases, when these increase, significantly, many individuals discover, their wages, don’t continue , with the inflation rate!

4. Stagnation: once we ask , stagnation, in economic/ financial terms, it refers to a big period of little, or lack of activity, growth, and/ or, meaningful development! When, this happens , for a protracted period of your time , it generally, creates a loss of employment possibilities, and, often, more unemployment. Historically, governments use a spread of economic stimuli, to strengthen, overall economic activity, and hopefully, restore us, to a stronger, better, economic condition .

When it involves money – matters, the more, one knows, the higher – off, we’d be, in being prepared, for eventualities. Learn the maximum amount as you’ll , for you own best interests.

Richard has owned businesses, been a COO, CEO, Director of Development, consultant, professionally run events, consulted to thousands, and conducted personal development seminars, for 4 decades. Rich has written three books and thousands of articles.