How Long does a Recession traditionally Last?

Recession does not last forever. Many people fear that How Long the Recession will Last? Some people believe that, recession will last for longer time and thus they withdraw their investments. They liquidate their portfolios.

But Well, Let me tell you that What is Recession & How it Works & How Long it Lasts?

Well, Recession means negative GDP for 2 consecutive quarters. See the above diagram of Normal Business Cycle. Let me tell you here that, Recession is a part of a Normal Business Cycle. Every 5-7 years a period of Contraction in the economy occurs which bottom outs (Trough) and than economy again starts recovering and the next time it breaks the growth of previous Growth (Prosperity).

Typically a recession lasts for 18 months. Except the great depression of 1929 which lasted for 4 years.

Sometimes after recovery, economy may again go down. This is known as double dip recession or “W” shaped recession. And sometimes the economy bounce back but does not break the previous growth and remains stable and that is known as Square root recession.

During this 18 months of period, the economy completely bottoms out. This level is known as trough. Recession is in many ways useful for the healthy economy in the long term. There are several advantages of the recession also.

One is that, Any non-viable business will be finished during the time of recession which is good for long term health of the economy. All the speculators will be wiped out during the time of recession which is also beneficial.

Another advantage of Recession is that, during the recession 2 things are available very cheap

01) Cheap Labour &
02) Cheap Assets

both of these things are required for any Business. So if you start your Business during the time of recession than you will find a cheap labour as well as Assets for your Business at low price.

So Don’t beware of Recession. Simply Start your Own Business during the time of recession and believe me….You won’t fail…!!!