L-Shaped Recovery
What It Is:
An L-shaped recovery refers to substantial losses in economic growth followed by a period of stagnation. Represented graphically, GDP data looks like the letter "L."
How It Works/Example:

Why It Matters:
The most famous example of an L-shaped recovery is that experienced by the Japanese economy through the 1990s and beyond. Following an abrupt decline in productivity, Japan's economy was plagued by stagnant productivity for several consecutive years.


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Cached on May 23, 2012, 9:30 am