Definition of Economic Recovery



What does the term "economic recovery" mean? What is meant by the term "economic recovery"?

An economic recovery occurs when an economy strengthens after a period of recession. In an economic recovery, various indicators will turn higher, including Gross Domestic Product annualized growth and employment.

Definition of Economic Recovery - IllustrationIn an economic recovery, businesses will see an uptick in demand and will start hiring. People will begin going back to work, confidence will start to increase and consumers will open their purses/wallets more.

Governments will usually try to bring an economy out of a recession by increasing the money supply (through the lowering of interest rates) and increasing spending (on infrastructure programs, etc).

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