The actual definition of a recession varies among institutions. In the United States, the definition is broad, with the National Bureau of Economic Research defining them as “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.” In the United Kingdom, however, the definition focuses solely on gross domestic product (GDP), or the total volume of goods and services produced within a country, with the HM Treasury defining recessions as “two or more consecutive quarters (a period of three months) of contraction in national GDP.” Despite the nuance, many recessions meet both criteria.

One of the most well-known examples of a recession is the Great Recession, which began in 2008 with a real estate crisis in the United States. The downturn quickly expanded, impacting countries around the globe. Watch this video for a quick 5 minute history lesson on the Great Recession.

Many economists believe that recessions are an inevitable occurrence; this is because of something known as the business cycle, a model that suggests economies continually cycle through periods of expansion and contraction. Visit this website to learn more about the business cycle.

Despite their potential inevitability, we do seem to be getting better at handling recessions. In the United States, the average duration of a contraction has fallen since 1854, while the length of expansions has grown. Visit this website to learn more about the timing and duration of past U.S. recessions.

Countries have also been breaking records for the length of their expansions (periods of growth that occur in the absence of a recession). Australia, for example, hasn’t experienced a recession for 27 years. Watch this video to learn more about how Australia has avoided a recession for so long.