Growth recession
Topic: Economic Growth Theories and Business Cycles · NCERT: Beyond NCERT
Meaning
A growth recession is a period when the economy keeps growing but so slowly that unemployment rises. Output does not shrink. Growth is simply too weak to create jobs for all the new workers joining the labour force. So people feel it as bad times even though GDP is still rising.
Example
Suppose GDP grows only a little, and fewer new jobs are created than new people join the workforce. GDP growth stays positive, but the unemployment rate goes up. That is a growth recession.
Don't confuse with
- Economic slowdown: in a slowdown, the growth rate falls but can still be high enough to hold unemployment steady. A growth recession specifically means unemployment rises.
- Recession: in a recession, output actually declines. In a growth recession it does not.
Related concepts
- Business cycle
- Expansion
- Overheating
- Goldilocks economy
- Peak
- Trough
- Recovery
- Soft landing
- Economic slowdown
- Recession