Difference between a "soft recession and a "hard" recession?
One of the questions asked in today's TickerHound challenge is "What is the definition of a recession. On the evening news, recession is definately on everyone's mind. One reporter talked about there being two types of recessions, soft and hard. What is the difference between the two?
Best Answer
825 points
Dragonsbane answered one year ago …
The definition of a recession is two consecutive quarters of negative growth (or negative GDP growth). A soft landing would imply a slowing of growth, to something below 1%, but GDP growth would still remain positive. I haven't heard the term soft recession, but I would guess it would be something between a soft landing and a regular recession. As opposed to what most people believe, recessions are a perfectly normal part of economic growth. A depression (also known as an economic collapse) is a prolonged economic contraction (much more than 2 quarters). It is also known as an economic collapse and the last depression in the US lasted 16 quarters (at least 12 of which were consecutive). Hope that helps, dB.
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957 points
CUWu answered one year ago …
My guess is that its synonymous with a "soft landing" and a "hard landing". A soft landing/soft recession would be one where employment would be maintained and we'd have a speedy recovery (employment would ensure continued consumer spending - 70% of GDP).
A hard landing/recession would mean a drop in employment and thus, a longer recovery period as the lack of consumer spending would cause business to decrease across the board.
Any other thoughts?
3963 points
MNSL answered one year ago …
In hard recession job losses will be higher. Income will be lower. People will spend less.They will postpone buying luxury items. As a result there will be less demand for some products such as electronic; products people not needed for immediate consumption etc. So some industries will be badly affected except some recession proof sectors. This type of situation will last for longer period.
More than that economy will be very weak. We want be able to see buoyant stock market.
So main things I see in the hard recession are: less income, less consumption, less job, lest spend and lest investment, finally weak economy. For example when people talk about recession in some European countries we were able to see above characteristics. When recovered from recession we saw mast improvements in economy including job market, demand for products, investment, and income and spend pattern etc.
On the contrary, soft recession will not be as difficult as hard recession. It will last for short period and economy will recover quickly.
508 points
John answered one year ago …
The difference is between the severity of the recession. a recession is a decline in any country's gross domestic product (GDP), or negative real economic growth, for two or more successive quarters of a year.
If the recession continues for more then twp quarters most would consider that a hard recession moving closer to the depression stage. We will probably not see a hard recession in our life times.
