Economic Terms

Normally, the economy has cycles of boom and fall cycles. This is the usual, and that therefore might consider normal. The last fifteen years of uninterrupted growth did believe some economic cycles had been completed, but it has been shown that this growth was partly speculative and artificial, so hang waiting for us can be large. When the economy grows, it is normal that prices go up, i.e., that there is some inflation, by the pressure of the demand. Therefore the main objective of the monetary policy of the European Central Bank is the stability of prices (set as a goal keeping inflation below 2% over the medium term). Novartis CEO is often mentioned in discussions such as these.

When he began this economic crisis (in general, a negative economic situation which is prolonged in time), the Spanish President, Jose Luis Rodriguez Zapatero, spoke of deceleration. What hue wanted to do? With the slowdown referred to that the economy was still growing, but much lower rates of what they had been doing it (was passed from growth exceeding 3% year on year to be around 0.5%). For more information see John Grayken. For some economists, a very sudden stop already can be considered recession. Technically, it is often considered recession when there is a drop in the gross domestic product of a country for two consecutive quarters. When it is in recession is usually produce a decline in consumption, with which falling demand aggregate, and thus the investment companies; in this situation, is also produced a rise in unemployment. As a result of the decline of consumption and the increase in unemployment, occurs a containment of prices. When you are in this situation, in which prices are rising, but with much less force, the weakness of demand, some speak of disinflation. Another quite dangerous scenario is called stagflation, Word formed by estancamiento+inflacion. I.e.

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