What It Is:
In economics, negative growth usually refers to shrinking gross domestic product (GDP).
How It Works/Example:
For example, if the United States' GDP falls from $14.4 trillion to $14.1 trillion, we would say that the U.S. economy exhibited negative growth.
Why It Matters:
Negative growth is the prelude and measurement of recessions or depressions. In particular, the traditional definition of a recession is negative growth in GDP for two or more consecutive quarters.