Contraction

Filed Under »
Dictionary Says

Definition of 'Contraction'

A phase of the business cycle in which the economy as a whole is in decline. More specifically, contraction occurs after the business cycle peaks, but before it becomes a trough. According to most economists, a contraction is said to occur when a country's real GDP has declined for two or more consecutive quarters.
Investopedia Says

Investopedia explains 'Contraction'

For most people, a contraction in the economy can be source of economic hardship; as the economy plunges into a contraction, people start losing their jobs. While no economic contraction lasts forever, it is very difficult to assess just how long a downtrend will continue before it reverses because history has shown that a contraction can last for many years (such as during the Great Depression).

Articles Of Interest

  1. Recession: What Does It Mean To Investors?

    Understanding the business cycle and your own investment style can help you cope with an economic decline.
  2. Peak-and-Trough Analysis

    Prices never move in straight lines, so it's time to learn about this powerful trend-following technique.
  3. Economic Indicators That Do-It-Yourself Investors Should Know

    Understanding these investing tools will put the market in your hands.
  4. Does High GDP Mean Economic Prosperity?

    GDP is the typical indicator used to measure a country's economic health. Find out what it fails to reveal and how the Genuine Progress Indicator can help.
  5. What Forex Traders Need To Know About The Yen

    The Japanese Yen possesses some unique qualities that traders should know before jumping in.
  6. Why The Consumer Price Index Is Controversial

    Find out why economists are torn about how to calculate inflation.
  7. Inspecting A Country's Debt

    Tensions over just how to handle debt are pitting the rich world against the developing world like never before.
  8. U.S. Vs. China: Battle To Be The Largest Economy In The World

    America's lengthy title reign as "World's Largest Economy" is fast under threat by China's surging economic growth. Find out what the global rankings are forecasted to be for these economic powerhouses. ...
  9. Countries With The Fastest And Slowest GDP Growth

    Discover which countries have shown the most growth since 1980, and which have shown the more ignominious fizzle and pop.
  10. Is Your Stock Headed South?

    Don't let your portfolio go with it! Find out which signs to watch out for.
comments powered by Disqus
Marketplace
Hot Definitions
  1. Xenocurrency

    A currency that trades in markets outside of its domestic borders.
  2. Wanton Disregard

    A standard of severe negligence. Wanton disregard is a very serious accusation that indicates that a person behaved extremely recklessly.
  3. Ultra ETF

    A class of exchange-traded funds (ETF) that employs leverage in an effort to achieve double the return of a set benchmark.
  4. Toehold Purchase

    A purchase of less than 5% of a target company's outstanding stockmade by an acquiring company. A toehold purchase of just under 5%, while not a significant stake in a firm, allows the shareholders a "toe-holds" grip on the company and its decision making.
  5. Samurai Bond

    A yen-denominated bond issued in Tokyo by a non-Japanese company and subject to Japanese regulations.
  6. Chartalism

    A non-mainstream theory of money that emphasizes the impact of government policies and activities on the value of money.
Trading Center
http://sp.fastclick.net/ad/tr/10858-64082-15546-0?mpt=0a35ddb1d6232f3e2416a2ca6358d493