Investing Answers Building and Protecting Your Wealth through Education Publisher of The Next Banks That Could Fail
Investing Answers Building and Protecting Your Wealth through Education Publisher of The Next Banks That Could Fail

Negative Growth

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.