Understanding the Term – Recession

According to NBER (National Bureau of Economic Research), recession is a significant decline in economic activity spread across the economy, lasting more than a few months, normally visible in real GDP, real income, employment, industrial production, and wholesale-retail sales. Shortly, recession happens when GDP (Gross Domestic Product) growth rate is negative for two consecutive quarters or more. The emergence of recession issues can be characterized by a drop in the following five economic indicators: real gross domestic product, income, employment, manufacturing, and retail sales.

US – China Trade War and Its Impact on Their Economic Growth

In 2020, many experts and analysts predict that the US will enter a period of recession, which can be seen from the United States GDP Quarterly Growth Rate on Figure 1. In the last 3 quarters, US economic growth fell from 3.1% to 2.3% in Q2 2019. This was triggered by the effects of a trade war that occurred during the past 1 year. The effect of this trade war also affected China, as their GDP growth also took a hit and fell from 6.8% to 6.2% within the same period.