Definition of Hard Landing



What does the term "hard landing" mean in the world of economics? What is the definition of the term "hard landing"?

In economics, a "hard landing" occurs when an economy quickly switches from growth-mode to either flat growth or a recession. In order to prevent high inflation, governments will usually craft their fiscal policy in order to slow down the economy without causing a recession. For instance, if the rate of inflation was ticking uncomfortably high, the government may raise interest rates in order to slow growth.

Definition and meaning of the term Hard Landing when it comes to the economy - Financial DictionaryThe goal of a government's fiscal policy is to have a "soft landing", which occurs when inflation ticks lower but growth remains high enough to avoid a recession.

A "hard landing", on the other hand, occurs when economic growth slows to nothing or even reverses. For obvious reasons, governments will do their very best to avoid "hard landings".

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