A recession is a period of negative economic growth characterised by rising
unemployment. In the short term, recessions can have various costs:
Loss of income
Firms going bankrupt.
Psychological and health problems of the unemployed
Higher government borrowing (lower tax receipts and higher benefit
spending)
But, what about the long term effects of recession?
Is there just a sweeping away of inefficient firms enabling a rebounding of
economic growth and higher productivity? - or
Is there a permanent loss of output and a persistent loss of economic
welfare, even when the recession is officially over?
http://econ.economicshelp.org/2012/01/long-term-effects-of-recession.html
