Growth Recession is a term in economics that refers to a situation where economic growth is slow, but not low enough to be a technical recession, yet unemployment still increases.
The term was created[when?] by Dr. Solomon Fabricant (New York University, National Bureau of Economic Research)[dead link] and is recognized and cited more recently by business economists. Note that the term also has slightly different secondary meanings including a more general one that growth is below potential. However, the more specific meaning indicates the growth is weak and insufficient to provide jobs for those entering the labor market (see the Hoisington and Hunt reference). There may also be a third meaning referring to growth in which more jobs are actually being destroyed than created. In all cases, the term indicates, Real GDP is expanding (slowly) but with job contraction, so the economy behaves or feels in many ways like a recession.
A Soft Landing tends to also be a Growth Recession, but this is not always the case. If economic growth in the economy is slowing to such a point that establishment payroll growth contracts, then the soft landing is so soft it has crossed over into a growth recession. The soft landings in the mid–1980s and the mid–1990s are examples.
Jobless Recovery, is a related term. All jobless recoveries are by definition also growth recessions, however not all growth recessions are jobless recoveries because a growth recession can occur at any point in an economic cycle, and a jobless recovery only refers to the period immediately after a recession ends.
- ^What is a growth recession? by Phil Thornton, 26 April 2012
- ^, Van R. Hoisington, Lacy H. Hunt, Ph.D., Hoisington Quarterly Review and Outlook Third Quarter 2007, “Growth Recession”[dead link]
Ofer Abarbanel is a 25 year securities lending broker and expert who has advised many Israeli regulators, among them the Israel Tax Authority, with respect to stock loans, repurchase agreements and credit derivatives. Founder TBIL.co STATX Fund.