A:

A growth recession is an instance in which an economy grows at such a slow pace that it creates net unemployment, meaning more jobs are actually lost in the economy than are being added. The term itself was coined by economists and is widely used by business economists to describe such economic instances.

In a growth recession, the lack of economic growth (or slowed economic growth) leads to decreased job creation. Therefore, even though the economy is not technically contracting like in a recession, the net loss of employment creates the similar economic conditions.

Using the guidelines set out by economists to describe a growth recession, many economists now believe that the United States saw growth recessions in 1986, 1995 and between 2002-2003. Although real GDP saw no significant drops during those periods, unemployment rose none-the-less. (To learn more, check out A Review Of Past Recessions.)

This question was answered by Lovey Grewal

RELATED FAQS
  1. Why does unemployment tend to rise during a recession?

    Learn what a recession is, some attributes of an economy in a recession, and why the unemployment rate tends to have a domino ... Read Answer >>
  2. How do financial markets react to recessions?

    Learn more about the relationship between recessions and financial markets by identifying the fundamental characteristics ... Read Answer >>
  3. What's the best investing strategy to have during a recession?

    Figure out how to take advantage of recessions, what assets to buy and which ones to avoid. Recessions are where some great ... Read Answer >>
  4. Is cyclical unemployment always due to recessions?

    Learn about the mechanisms that cause cyclical unemployment and find out about the role recessions and downturns play in ... Read Answer >>
  5. What causes recessions?

    Learn more about possible explanations of recessions in the business cycle, including how individual firms react to changing ... Read Answer >>
  6. What causes a recession?

    According to the National Bureau of Economic Research (NBER), recession is defined as "a significant decline in economic ... Read Answer >>
Related Articles
  1. Insights

    Top 4 Things To Know About The Last Double-Dip Recession

    The financial media and investors are haunted with the prospect of a double-dip recession. We look to the past to see if a double-dip recession is in our future.
  2. Insights

    Recession And Depression: They Aren't So Bad

    Financial downturns are part of the economic cycle and may have important long-term benefits.
  3. Insights

    Will Your Net Worth Be Affected By A Recession?

    Here's a look at how a potential recession could impact your net worth in a negative way.
  4. Insights

    A Review Of Past Recessions

    Here we look at the biggest economic declines in the U.S. since the Great Depression.
  5. Insights

    6 Factors That Point to Global Recession in 2016

    We may be on the verge of another global recession.
  6. Investing

    Tips For Recession-Proofing Your Portfolio

    Find out what to do when the sun sets on a burgeoning market.
  7. Insights

    Do Declining Corporate Margins Point To Recession in 2016?

    Learn how declining profit margins have foretold nearly every recession of the past 50 years, and analyze whether they may signal economic contraction in 2016.
  8. Insights

    What Causes A Recession?

    Many factors contribute to a recession, but the biggest one is inflation.
  9. Financial Advisor

    Why Advisors Shouldn't Fear a Recession

    Advisors who have clients who may fear a recession should take note that there is always some opportunity in a volatile market.
  10. Insights

    What Is A Double Dip Recession?

    Learn the economic details behind the ups and downs of a double dip recession.
RELATED TERMS
  1. Recession Resistant

    An entity which is not greatly affected by a recession. Recession ...
  2. Economic Recovery

    A period of increasing business activity signaling the end of ...
  3. Negative Growth

    A contraction in a country's economy, as evidenced by a decrease ...
  4. Global Recession

    An extended period of economic decline around the world. The ...
  5. Rose-Colored Recession

    The unexpected optimism market observers sometimes experience ...
  6. Recession Rich

    A slang term used to describe an individual who manages to do ...
Hot Definitions
  1. Return on Market Value of Equity - ROME

    Return on market value of equity (ROME) is a comparative measure typically used by analysts to identify companies that generate ...
  2. Majority Shareholder

    A person or entity that owns more than 50% of a company's outstanding shares. The majority shareholder is often the founder ...
  3. Competitive Advantage

    An advantage that a firm has over its competitors, allowing it to generate greater sales or margins and/or retain more customers ...
  4. Mutual Fund

    An investment vehicle that is made up of a pool of funds collected from many investors for the purpose of investing in securities ...
  5. Wash-Sale Rule

    An Internal Revenue Service (IRS) rule that prohibits a taxpayer from claiming a loss on the sale or trade of a security ...
  6. Porter Diamond

    A model that attempts to explain the competitive advantage some nations or groups have due to certain factors available to ...
Trading Center