Nicholas Bloom

Recession have a huge impact in the industry because it reduces consumer’s purchasing power which leads to reduce expenditure in different goods and services

Human behavior is sensitive to and strongly influenced by its environment. When the economy starts recession, manufactures would shrink the volume of production, investor will invest less and people will spend less money on new products, and as the result, which would causes the economy become worse. And on the other hand, good economy leads people to buy more.

A recession occurs when a country’s real GDP begins to shrink. Even a milder economic slowdown in which GDP continues to grow, but very slowly can create unemployment and dislocation. GDP and employment are positively correlated. As GDP rises

A recession is characterised by a period of at least two consecutive quarters of negative growth. During a recession, demand and supply of goods and services in the economy contracts. The UK economy contracted by 1.5% in the last quarter of 2008 and the Gross Domestic Product experienced its biggest fall since the second quarter of 1980 (Kowelle 2009). This is the first time since the inception of the NMW that employment has fallen. Unemployment is rapidly on the increase.

According to the financial definition, a recession is a significant decline in activity spread across the economy, lasting longer than a few months. It is visible in industrial production, employment, real income, and wholesale-retail trade. The technical indicator of a recession is two consecutive quarters of negative economic growth as measured by a country's GDP. (Dictionary.com) A less official and more realistic definition of an economic recession is the social perception of the state of the economy at a given time. The collective beliefs of the public, mainly businesses and consumers, drive the social perception of whether things are seen as positive or negative. Unfortunately

Speculative risk exists when there is uncertainty about an event that can produce either a profit or a loss.

Usually, a recession is when a slowdown in economic activity happens and can cause a decrease in jobs, as well as constricted credit for loans, and lethargic or disheartened sales overall. To be precise, a recession is defined as a decrease in the nation’s total economic activity (the GNP) for two or more consecutive quarters. We know when a recession occurs because it affects everyone. You might lose your job, be turned down for a loan that you normally could have gotten etc… The government intervenes by implementing the fiscal policy; it is a type of economical intervention where the government inserts its guidelines into the economy to either expand the economy’s growth or to contract it. They do this by fluctuating the levels of spending and taxation, the governments can directly or indirectly affect the total demand, which is the total amount of goods and services in the economy.

Ever since World War II the United States has experienced many recessions. There have been many terrible recessions that have hit this great country hard. What is a recession people may wonder? A recession is a significant decline in activity across the economy, lasting longer than a few months. It is visible in industrial production, employment, real income and wholesale-retail trade. The technical indicator of a recession is two consecutive quarters of negative economic growth as measured by a country 's gross domestic product (GDP). Although, the recession of 2001 wasn’t a dramatic and horrible recession, it was the end of the longest expansion our country had seen since WWII. The expansion following the recession of 1991 was 10 years up until this recession of 2001. Furthermore, this recession was difficult and was hard to deal with and overcome, because during the time of this recession our country experienced 9/11.

The business cycle expands and contracts as the GDP grows or shrinks. The business cycle includes periods of recession and expansion, and peaks and troughs. Although the business cycle can appear to be a volatile up and down movement, the long term movement of real GDP is generally not affected and reaches upward. In an article by Langelett and Schug (2005), the authors discuss how real GDP and business cycle changes are related. A business cycle begins with an expansion where real GDP is rising and reaches the high point or peak of the expansion (Langelett &Schug, 2005). During this time, individuals and businesses feel comfortable with the current state of the economy and begin spending more. A good economy can last many years although, inevitably, the economy will begin to slow. During times of recession, individuals and business feel uneasy about the future and reduce their spending causing the GDP to decline. The GDP is an important measure for voters to comprehend when deciding between candidates and their economic

Two macroeconomic variables that decline when the economy goes into a recession are real GDP and investment spending. GDP will decrease because the economy will be producing fewer goods and services overall. Investment spending, spending on new capital, will decrease in order to conserve and spend in other areas. The unemployment rate is one macroeconomic variable that will rise during a recession. If an economy begins producing fewer goods and services, businesses will need fewer employees to meet the production demand.

To answer the first question and what I can identify with is the great recession in the United States. An economic recession is considered a business cycle contraction. This is when the economy is in decline. During this time many microeconomic indicators react in similar ways such as, economic hardships, mass unemployment, investments, incomes, capital utilization and inflation all decline in a recession.

Risk literature often separates 'risk ' from 'uncertainty ', defining the risk as a measurable probability that something will happen, however, even where experts claim they can give an exact probability value to a risk, there is always a possibility that the experts may be wrong (Hansson 2002 p4). In common usage the words 'risk ' and 'uncertainty ' are often synonymous (Lupton 1999 p9)

The article covers a number of key concepts in macroeconomics. The first is the idea of the recession, something that Coy discusses at length in the article. We notes that the recession cam e as the result of a real estate bubble that stoked consumer spending. The author notes that the recession ended in 2009 when the economy stopped contracting, but that growth since then has been slow and as a result the economy is below the trendline, so it is underperforming the level where it should be. The author does not note if that trendline was adjusted for the bubble or if it accepts the bubble as being a reasonable contributor to the trendline while the recession is not.

Recession is a term that looms over any society at some point or another but what does recession mean for the economy, in short it is an economic decline. This essay will examine the meaning of recession and will discuss the fiscal and monetary policies that are used to pull economies out of recessions. The great Recession of 2008 will shed light on how these policies were successful at restoring economic growth and reducing unemployment.

Leverage is the ability to influence a system, or an environment, in a way that multiplies the outcome of one 's efforts without a corresponding increase in the consumption of resources. In different words, leverage is the advantageous condition of having a relatively small amount of cost yield a relatively high level of returns. Indeed, it is extremely important to quantify the effect of financial leverage on stock return volatility in a dynamic general equilibrium economy with debt and equity claims. The effect of financial leverage is studied both at a market and a firm level where the firm is exposed to both idiosyncratic and market risk. In a benchmark economy with both a constant interest rate and constant price of risk, financial leverage generates little variation in stock return volatility at the market level but significant variation at the individual firm level. In an economy that generates time-variation in interest rates and the price of risk, there is significant variation in stock return volatility at the market and firm level. In such an economy, financial leverage has little effect on the dynamics of stock return volatility at the market level. Financial leverage contributes more to the dynamics of stock return volatility for a small firm.