Recession in the context of "Capitalism"

Business cycles are intervals of general expansion followed by recession in economic performance. The changes in economic activity that characterize business cycles have important implications for the welfare of the general population, government institutions, and private sector firms.

There are many definitions of a business cycle. The simplest defines recessions as two consecutive quarters of negative GDP growth. More satisfactory classifications are provided first by including more economic indicators and second by looking for more data patterns than the two quarter definition. In the United States, the National Bureau of Economic Research oversees a Business Cycle Dating Committee that defines a recession as "a significant decline in economic activity spread across the market, lasting more than a few months, normally visible in real GDP, real income, employment, industrial production, and wholesale-retail sales."

West Bromwich (/ˈbrɒmɪtʃ/ BROM-itch), commonly known as West Brom, is a market town in the borough of Sandwell, in the county of the West Midlands, England. Historically part of Staffordshire, it is 7 miles (11 kilometres) northwest of Birmingham. West Bromwich is part of the area known as the Black Country, in terms of geography, cultures and dialect. West Bromwich had a population of 103,112 in the 2021 Census.

Initially a rural village, West Bromwich's growth corresponded with that of the Industrial Revolution, owing to the area's natural richness in ironstone and coal, as well as its proximity to canals and railway branches. It led to the town becoming a centre for coal mining, brick making, the iron industry and metal trades such as nails, springs and guns. The town's primary economy developed into the engineering, manufacturing and the automotive industry through the early 20th century. During the Second World War, West Bromwich experienced bombing from the German Luftwaffe. It also suffered heavily during recessions in the mid 1970s, early 1980s and late 2000s.

John Maynard Keynes, 1st Baron Keynes CB, FBA (/keɪnz/ KAYNZ; 5 June 1883 – 21 April 1946), was an English economist whose ideas fundamentally changed the theory and practice of macroeconomics and the economic policies of governments. Originally trained in mathematics, he built on and greatly refined earlier work on the causes of business cycles. One of the most influential economists of the 20th century, he produced writings that are the basis for the school of thought known as Keynesian economics, and its various offshoots. His ideas, reformulated as New Keynesianism, are fundamental to mainstream macroeconomics. He is known as the "father of macroeconomics".

Keynes was educated at King's College at the University of Cambridge, where he graduated in 1904 with a B.A. in mathematics. During the Great Depression of the 1930s, Keynes spearheaded a revolution in economic thinking, challenging the ideas of neoclassical economics that held that free markets would, in the short to medium term, automatically provide full employment, as long as workers were flexible in their wage demands. He argued that aggregate demand (total spending in the economy) determined the overall level of economic activity, and that inadequate aggregate demand could lead to prolonged periods of high unemployment, and since wages and labour costs are rigid downwards the economy will not automatically rebound to full employment. Keynes advocated the use of fiscal and monetary policies to mitigate the adverse effects of economic recessions and depressions. After the 1929 crisis, Keynes also turned away from a fundamental pillar of neoclassical economics: free trade. He criticized Ricardian comparative advantage theory (the foundation of free trade), considering the theory's initial assumptions unrealistic, and became definitively protectionist. He detailed these ideas in his magnum opus, The General Theory of Employment, Interest and Money, published in early 1936. By the late 1930s, leading Western economies had begun adopting Keynes's policy recommendations. Almost all capitalist governments had done so by the end of the two decades following Keynes's death in 1946. As a leader of the British delegation, Keynes participated in the design of the international economic institutions established after the end of World War II but was overruled by the American delegation on several aspects.

Food distribution is the process where a general population is supplied with food. The Food and Agriculture Organization (FAO) considers food distribution as a subset of the food system. The process and methodology behind food distribution varies by location. Food distribution has been a defining characteristic of human behavior in all societies, and recordings of food distribution date back for thousands of years. Most governments and societies are highly shaped by the systems created to support food distribution.

There are a multitude of risk factors that can affect food distribution. War, economic failure, political problems, and weather conditions all play a role in determining the efficiency of any food system. Two recent examples of war and economic failure impacting food distribution includes the decline of food distribution in Japan during World War II and food recession in Sub-Saharan Africa during the late 1970s and early 1980s. In both cases, food distribution was hindered and the population in these areas consequently suffered.

A financial crisis is any of a broad variety of situations in which some financial assets suddenly lose a large part of their nominal value. A broader reduction of economic activity affecting the whole economy is known as an economic crisis. In the 19th and early 20th centuries, many financial crises were associated with banking panics, and many recessions coincided with these panics. Other situations that are often called financial crises include stock market crashes and the bursting of other financial bubbles, currency crises, and sovereign defaults. Financial crises directly result in a loss of paper wealth but do not necessarily result in significant changes in the real economy (for example, the crisis resulting from the famous tulip mania bubble in the 17th century).

Many economists have offered theories about how financial crises develop and how they could be prevented. There is little consensus and financial crises continue to occur from time to time. It is apparent however that a consistent feature of both economic (and other applied finance disciplines) is the obvious inability to predict and avert financial crises. This realization raises the question as to what is known and also capable of being known (i.e. the epistemology) within economics and applied finance. It has been argued that the assumptions of unique, well-defined causal chains being present in economic thinking, models and data, could, in part, explain why financial crises are often inherent and unavoidable.

The Great Recession was a period of market decline in economies around the world that occurred from late 2007 to mid-2009, overlapping with the closely related 2008 financial crisis. The scale and timing of the recession varied from country to country (see map). At the time, the International Monetary Fund (IMF) concluded that it was the most severe economic and financial meltdown since the Great Depression.

The causes of the Great Recession include a combination of vulnerabilities that developed in the financial system, along with a series of triggering events that began with the bursting of the United States housing bubble in 2005–2012. When housing prices fell and homeowners began to abandon their mortgages, the value of mortgage-backed securities held by investment banks declined in 2007–2008, causing several to collapse or be bailed out in September 2008. This 2007–2008 phase was called the subprime mortgage crisis.

An economic expansion is an upturn in the level of economic activity and of the goods and services available. It is a finite period of growth, often measured by a rise in real GDP, that marks a reversal from a previous period, for example, while recovering from a recession. The explanation of fluctuations in aggregate economic activity between expansions and contractions ("booms" and "busts" within the "business cycle") is one of the primary concerns of macroeconomics.