Opinion
Opinion

Why Recessions Are Not About Declining GDP

Why Recessions Are Not About Declining GDP
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Commentary

Most economic commentators consider a decline in economic statistics, such as gross domestic product (GDP), as indicative of a decline in the health of the economy. According to most experts, this decline in the GDP—which is called a recession—as a rule, arises because of an overall decline in the aggregate demand for goods and services. This is seen predominantly as a decline in the private sector’s buying of goods and services.

Frank Shostak
Frank Shostak
Author
Frank Shostak, Ph.D., is an associated scholar of the Mises Institute. His consulting firm, Applied Austrian School Economics, provides in-depth assessments and reports of financial markets and global economies. He has taught at the University of Pretoria and the Graduate Business School at Witwatersrand University.