Recovery
Topic: Economic Growth Theories and Business Cycles · NCERT: Beyond NCERT
Meaning
Recovery is the phase after the trough. Output, jobs and investment begin to rise again towards their earlier levels. The shape of a recovery can differ. It may be V, U, W, L, swoosh or K-shaped. A fast rebound in growth rates can still leave the level of output permanently below its old trend. This lasting loss is called scarring.
Example
India's GDP contracted by about 5.8% in 2020-21 (final estimate, 2011-12 series). It rebounded by 9.4% in 2021-22, as reported in NCERT. The later revised figure should be verified.
Don't confuse with
- Expansion: expansion is the broader upswing that builds into a boom and a peak. Recovery is the climb back after a trough.
Related concepts
- Business cycle
- Expansion
- Overheating
- Goldilocks economy
- Peak
- Trough
- Soft landing
- Economic slowdown
- Growth recession
- Recession