12 minutes agoWhat's the recession, where has the German economy fallen?
Periskopi(3 years ago)
(3 years ago)The German economy has plunged into recession. How dramatic is the situation? Initially the body's pandemic with all its consequences, for example, dramatic problems in supply chains, then Ukraine's war: the German economy faced a double blow in recent years. Prices and interest rates are increasing, barriers to supplies [...]
Initially the body's pandemic with all its consequences, for example, dramatic problems in supply chains, then Ukraine's war: the German economy faced a double blow in recent years. Prices and interest rates are growing, barriers to supply and energy shortages are burdening the economy, and according to economists' theories, that economy is going up and down in wave form. Economists usually talk about four phases:
- Economic growth or prosperity
- Economic boom
- Session
- Economic Depression
The recession means falling, for example. when production capacities are no longer fully exploited because of falling both export levels in foreign trade and demand for goods and services on the domestic market.
This can happen very quickly, not just in Germany, because consumers have to pay a lot of money because of high energy prices, which leads to the decline in purchasing power for other products.
Raw Internal Production
As a standard measure for economic cycles, it is considered the multiquoted gross domestic production, or GDP, in short. This term represents the value of all services and goods produced over a certain period of time.
If GDP shrinks for two quarters in a row, it's “technical recession” ) who threatened Germany in late 2021 after GDP had contracted by 0.3 percent in the last quarter of the year as a result of the coronary pandemic. In the first three months of 2022, economic output increased by 0.2 percent. But in the spring of 2023, the situation is presented differently. Because the German economy contracted in both the last quarter of 2022 and the first quarter of the current year.
Economic depression as horror scenario
If a recession lasts for a relatively long period of time, it could turn into a real economic crisis. In such cases, economic depression -- unemployment and the number of bankruptcys increase -- goods remain in storage. The terrible scenario complements financial crises, stock exchanges decreases and bank bankruptcy.
Treatment Tool - State Relief Programs
Therefore, it is important that the state prevent depression and therefore decline in the lowest phase of the economic cycle. Therefore, the government will try to counter the ongoing recession in the country or last as little as possible. Tested tools to do so are the relief packages for companies and citizens, such as government aid and tax cuts. / DW
