DEFINITION of 'L-Shaped Recovery'

A type of economic recession and recovery that resembles an "L" shape in charting. An L-shaped recovery represents the shape of the chart of certain economic measures, such as employment, GDP and industrial output. An L-shaped recovery involves a sharp decline in these metrics followed by a long period of flat or stagnant growth.

BREAKING DOWN 'L-Shaped Recovery'

Many refer to the 1990s-era in Japan as a classic example of an L-shaped recession, where there was an economy that essentially flatlined for a decade. There are countless other shapes a recession and recovery chart can take, including V-shaped, W-shaped, U-shaped and J-shaped. Each shape represents the general shape of the chart of the economic metrics that gauge the health of the economy.

RELATED TERMS
  1. V-Shaped Recovery

    A type of economic recession and recovery that resembles a "V" ...
  2. U-Shaped Recovery

    A type of economic recession and recovery that resembles a "U" ...
  3. W-Shaped Recovery

    An economic cycle of recession and recovery that resembles a ...
  4. Economic Recovery

    A period of increasing business activity signaling the end of ...
  5. Recession

    A significant decline in activity across the economy, lasting ...
  6. Jobless Recovery

    An economic recovery, following a recession, where the economy ...
Related Articles
  1. Investing

    Will China See an L-Shaped Recovery?

    According to a source quoted in the People’s Daily, China will experience an L-shaped recovery. Here's why.
  2. Insights

    Recession: What Does It Mean To Investors?

    Understanding the business cycle and your own investment style can help you cope with an economic decline.
  3. Investing

    Tips For Recession-Proofing Your Portfolio

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

    4 Countries in Recession and Crisis Since 2008

    See which major world economies haven't recovered from the global recession in the early 21st century, including a long-stagnant industrial power in Asia.
  5. Insights

    6 Factors That Point to Global Recession in 2016

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

    The Top ETFs For a Fast Recovery After a Recession

    Recession and recovery cycles are imminent in the markets. Here are the ETFs, which provide the best performance for a fast recovery after a recession.
  7. Investing

    Why China Keeps Dead Corporations Walking

    Here's why the Chinese government keeps lending more money to zombie corporations.
  8. Small Business

    The Impact Of Recession On Businesses

    Find out how this economic cycle affects both small and big business.
  9. Insights

    A Review Of Past Recessions

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

    What Causes A Recession?

    Many factors contribute to a recession, but the biggest one is inflation.
RELATED FAQS
  1. What is a V-shaped recovery and how is it different from other recoveries?

    A V-shaped recovery depicts an economic situation where a severe downturn in the markets is met with an equally strong upturn ... Read Answer >>
  2. What is a growth recession?

    A growth recession is an instance in which an economy grows at such a slow pace that it creates net unemployment, meaning ... 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. What causes a recession?

    According to the National Bureau of Economic Research (NBER), recession is defined as "a significant decline in economic ... Read Answer >>
  5. 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 >>
  6. What are the best measurements of economic growth

    Learn how economists and statisticians track economic growth and why GDP might not be the best measurement of real economic ... Read Answer >>
Hot Definitions
  1. Cover Letter

    A written document submitted with a job application explaining the applicant's credentials and interest in the open position. ...
  2. 403(b) Plan

    A retirement plan for certain employees of public schools, tax-exempt organizations and certain ministers. Generally, retirement ...
  3. Master Of Business Administration - MBA

    A graduate degree achieved at a university or college that provides theoretical and practical training to help graduates ...
  4. Liquidity Event

    An event that allows initial investors in a company to cash out some or all of their ownership shares and is considered an ...
  5. Job Market

    A market in which employers search for employees and employees search for jobs. The job market is not a physical place as ...
  6. Yuppie

    Yuppie is a slang term denoting the market segment of young urban professionals. A yuppie is often characterized by youth, ...
Trading Center