L-Shaped Recovery

AAA

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.

INVESTOPEDIA EXPLAINS '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. Global Recession

    An extended period of economic decline around the world. The ...
  2. U-Shaped Recovery

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

    A type of economic recession and recovery that resembles a "V" ...
  4. Gross Domestic Product - GDP

    The monetary value of all the finished goods and services produced ...
  5. Recession

    A significant decline in activity across the economy, lasting ...
  6. The Great Recession

    The steep decline in economic activity during the late 2000s, ...
Related Articles
  1. Bonds & Fixed Income

    5 Signs Of A Credit Crisis

    These indicators can illuminate the depth and severity of problems in the credit markets.
  2. Mutual Funds & ETFs

    8 Fund Types To Use In A Recession

    When the economy blows up, these funds offer some protection from major losses.
  3. Investing

    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 in the markets. The V refers to the general shape a chart forms based ...
  4. Economics

    4 Tips For Buying Stocks In A Recession

    Bear markets can terrify even seasoned investors. Learn how to invest safely.
  5. Budgeting

    Five Strategies For Surviving Tough Times

    Cruise through a slowing economy - even when others are going off the rails.
  6. Home & Auto

    How did the ABX index behave during the 2008 subprime mortgage crisis?

    Read about the disastrous performance of the various ABX indexes in the subprime mortgage crisis of 2008 during the middle of the Great Recession.
  7. The law of supply and demand is one of the most basic principles in economics.
    Economics

    What is Supply & Demand?

    The law of supply and demand is one of the most basic principles in economics. In simplest terms, the law of supply and demand states that when an item is scarce, but many people want it, the ...
  8. Bonds & Fixed Income

    End of Fed's Bond-Buying Program: 7 Things To Know

    This article helps investors understand the economic and financial effects that result when a central bank (like the Fed) ends its bond purchase program.
  9. Personal Finance

    Who regulates a credit rating agency?

    Find out how American and international regulators interact with Credit Rating Agencies, and learn about the rules adopted since the financial crisis.
  10. Investing News

    A Carbon Capture And Storage Breakthrough

    Carbon capture and storage (CCS) has been weighed down by exorbitant costs, making it an industry that’s been stuck on the launch pad for over a decade.

You May Also Like

Hot Definitions
  1. Commodity

    1. A basic good used in commerce that is interchangeable with other commodities of the same type. Commodities are most often ...
  2. Deferred Revenue

    Advance payments or unearned revenue, recorded on the recipient's balance sheet as a liability, until the services have been ...
  3. Multinational Corporation - MNC

    A corporation that has its facilities and other assets in at least one country other than its home country. Such companies ...
  4. SWOT Analysis

    A tool that identifies the strengths, weaknesses, opportunities and threats of an organization. Specifically, SWOT is a basic, ...
  5. Simple Interest

    A quick method of calculating the interest charge on a loan. Simple interest is determined by multiplying the interest rate ...
  6. Special Administrative Region - SAR

    Unique geographical areas with a high degree of autonomy set up by the People's Republic of China. The Special Administrative ...
Trading Center