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Defining Recession (CRS Report for Congress)

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Release Date Sept. 30, 2024
Report Number IF12774
Report Type In Focus
Authors Lida R. Weinstock
Source Agency Congressional Research Service
Summary:

Over time, an economy fluctuates between periods of above- and below-average short-term growth. These fluctuations are referred to as the economy’s “business cycle.” As the economy moves through the business cycle, gross domestic product (GDP) and several additional economic indicators rise and fall. Policymakers may seek to act preventatively or swiftly when recessions occur, making the identification of recessions a critical component of fiscal and monetary policy. This In Focus discusses how U.S. recessions are officially defined, what rules of thumb economists and policymakers use to gauge the health of the economy, and how accurate those unofficial measures tend to be. For further discussion of the business cycle and the economy, see CRS In Focus IF10411, Introduction to U.S. Economy: The Business Cycle and Growth, by Lida R. Weinstock.
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