Major causes of recession

RecessionConcept of recession

A recession is meant by an economic decline.It is an activity, which is spread from corner to corner the economic condition of more than three months.The studies of macro economies show us that a recession is generated due to decline in Gross domestic product (GDP), Gross national product (GNP), inflation, deflation, stagflation and hyperinflation. The economists declare these conditions as the economic collapse.

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Model of depression

But the depression is known as the most devastating economical condition in the region.It is remembered as the great slump in the world marketing system.During the depression phase, all the economic activities around the world are turned into absolute downward slope.In the historical perspective, the United States is firstly come into mind about the great depression during the period of 1929.At that time all the US stock market was dramatically destroyed due to countless inflation, deflation, hyper inflation and stagflation as well as many other factors.

Causes of recession

Demand and supple factor

A recession can take place in the national cultural system because of the excessive supply and demand of things.It is occurred at time, when the industrial production is made on a huge level by employing the labor and machine.But the demands of the consumers do not come up according to the supply conditions.Therefore the excessive supply factor would be reduced and slump.

On the other hand, when the consumer needs exceeds on a large amount of level.It leads the more demanding aspect of the people.At that time, the industrial production is reduced.The prices of the item would also be higher than the pervious.The consumers would buy the things on the huge amount to satisfy their needs and wants. This is happened because of the poor industrial and marketing policies, where the demand and supply factor is not counted into a balancing framework.Therefore the roles of think tanks come into play at that time of industrial recession.


The general rice in the price value can cause the recession in the world marketing system. In this way, the prices of domestic item such as wheat, flour, oil, sugar, vegetables, meat, bread, fruits etc are stunningly increased.Moreover the oil prices in the world around would be increased at an alarming level.Now a day the oil prices in all over the world has been increased at a huge level. It led the whole world into recession phase.The United States of America has been under the threat of recession.The economists are saying that the next world recession would be the ever lasting.This is a very concerning sign for all of us.

Stock market plunge

One of the major reasons of recession is the down fall in stock marketing system in the world around.Recently the United States war against Iraq led the US into absolute recession phase.Most of the civilians of United States are saying that this war led their stock market into downfall stage.Moreover the day by day alarming events of terrorism led the United States into recession.Therefore stock market boom has gone down badly. According the economic analysts, the stock market of the United States and all around the world is getting affected due to increasing events of terrorism.That is the major concern of US.

Stock sells off

A recession can also be occurred due to the whole sell out of the stock market shares and bonds.It is mainly occurred due to the over all speculating trend of stock marketing system around the world.The alarming cultural events such as war, catastrophe, inflation, deflation, stagflation and hyper inflation could also create such situation of stock market sell out.

Households saving factor

This is the most rotating trend in the economic cycle theory that the saving of a consumer is very important from all of the contents.A household saving can cause the recession in the global market.It is occurring at the current phase of the world.Most of the people of world are saving their money in the stocks.The flown of money in not rotating.Which led the world into absolute recession?The majority of the investments stocks are in the hands of the rich people of the world.They are not exposing their money.So we are facing a recession in our globe.


The recession is caused by over consuming. Most of the people of world are spending money more than their needs and wants.People have become luxurious.They want to show off.Every one is the race of fashion and designing.Hells of costly costumes are being purchased to keep the beauty.Then the heavy as well as costly food stuff is being eaten. The overconsumption led the world into absolute recession and poverty really.Meanwhile it has been the major worry of United States that consumed billions of dollars over the Iraq war.The economists are saying accordingly that the united states have got to be careful regarding to its consumption plans in the future.

Asian contamination

The economists are saying that the Asia has been under the strong threat of terrorism which can cause the United States into absolute recession phase.In this way, the US has been continuously implementing its policies regarding all the concerns of economic recession.Moreover the economic activity has been slumped in the regions of Asia.The inflation, deflation, hyperinflation, stagflation, poverty, flood, earthquake, stock market downfall, dirty environment are the alarming factors of the Asian countries.This led the United States attentions and inquiries towards the recession.Therefore the United States has been studying the Asian contaminations very seriously to put the world back on track really.

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Major causes of recession
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