ARE RECESSION GOOD FOR THE ECONOMY??????

-----------To continue my viewpoints on this topic i would like firstly 2 make clear what actually recession is---------

The definition of a recession is a decline in a country's gross domestic product (GDP), or negative real economic growth, for two

or more successive quarters of a year

----------RECESSION CYLE-----------

1: When the economy is strong, most people are employed and making money. There will then be a larger demand for goods such

as food, electronics & vehicles and this increases so much that the supply can not keep up with the demand

2: This excess demand creates a rise in prices, or inflation. As prices go up, salary's need to rise to keep up with the rising prices

of goods The rise in employment cost for companies translates into a rise in prices for most items.

3: When the prices for goods and services get too high, consumers decide goods are too expensive and slow down or stop

buying. When the demand decreases, companies lay off workers because they don't need to make as much as before.

4: Decreasing demand fuels declining prices, which means the economy is in a recession.

5: Companies counter act this by lowering prices to spur the demand. As demand picks up, people begin buying again, fueling the

need for greater supply. And the cycle starts again.

----------NOW THE QUESTION IS ARE RECESSION GOOD FOR THE ECONOMY?????------------

I am of the opinion that recession is not only good, but necessary. Unchecked growth leads to stagnation, the loss of experience

and leads to more and more risky choices.

I liken it to forest fires. Unchecked growth leads to a lot of dead brush which increases the risk of fire. Fire is not only necessary -

but good. It creates space for new, fresh growth, and replenishes the soil with nutrients that will spurt new growth.

The economy is the same. The dollar has been weakening, jobs have been flowing overseas, our wages and quality in products

have been steadily becoming less competitive (think cars, and technology). And prices are at record levels of inflation (even house

prices still).

Recession will wipe out dead brush (bad investments, bad debt), and will leave fertile soil for new and fresh growth (stronger

dollar, the return of jobs from overseas, and a lower cost of living).

"Now as i have pointed out why recession is good---bt on the other side would like to put some light on WHAT RECESSION

LEADS TO--- there are big, big costs to a recession. Unemployment goes up, incomes go down, and we see all kinds of social

issues and indicators deteriorate also during a recession.

If there are any benefits to a recession, they certainly have to be weighed against the big costs.

----------FEW REASON IN SUPPORT OF MY ANSWER WHY RECESSSION IS GOOD FOR THE ECONOMY--------

1--For us investing in precious metal, recession soars your investment value. For we that haven’t do so, will start thinking about

investing in a more stable and inflation-free investment options, which is a good move.

2--Recession push us to work smarter – we will use more creativity juices to tackle the recession, which leads to better productivity

and more breakthroughs.

3--Recession is good for your personal finance and money management. Recession will push us to re-manage our personal finance

– we will count every penny spent more vigorously than ever.

4--we will live a healthier and greener life – we will start thinking to change your light bulbs to LEDs, reducing non-essential

household power consumption, walking the pavement or riding a bicycle instead of driving a car, less eating out and more home

cooking, less meat eating and more vegetable eating, and many other benefits.

5--Energy saving and alternative energy companies will reach record high in sales. New energy-related business will be established

and gain better success rate.

6--Recession will make family members think more of their family – Stronger bond, stronger will to survive the recession –

definitely a good thing!

7--Be strong and take courage – Recession will test and form our character and willpower. When the recession has passed, we are

becoming a new and better man.

-----CONCLUSION:------------

RECESSION is good for the economy.I think it plays a cleansing role. That is, a recession will get rid of weaker companies, it will

reduce weaker sectors in the economy, and this will allow resources in the economy -- that is, money and technology and

machinery and workers -- to move away from declining sectors to growing sectors. Therefore, it will put the economy on sounder

footing and allow it to grow faster in the future.

"It's kind of akin to fires in a forest, where some foresters say that forest fires are actually good periodically because it kind clears

out the dead brush and the dead trees and leaves the forest in a better position to grow faster in the future.

thank you

these were my view points

seema arora

mba-b