The Definition Of Economic Rehabilitation

1. The definition of economic restoration

An economic rehabilitation is an aspect of the business cycle that follows a recession, characterized by extended periods of improved business performance. During the economic recovery process , the growth rate of gross domestic product (GDP) is always positive whether it increases or decreases at times.

Economic habilitation is part of the expansion phase. Typically, economists divide the business cycle into four phases: expansion, peak, contraction, and trough. GDP is often the key indicator for determining the stage of the business cycle .

There are many reasons for the ups and downs of the market economy. The economy can be affected by many factors, including revolutions, crises and global influences.

The economic restoration is often not easily recognizable until several months after it began. Typically, economic recovery occurs after the bottom of the business cycle, and is characterized by many consecutive quarters of positive GDP growth followed by two consecutive negative GDP growth quarters that mark a recession. .

During the recovery, GDP may grow steadily or have periods of spikes. The overall economic restoration will see positive quarterly GDP growth , helping an economy build momentum for further expansion.

2. Evidence of economic recovery

The recovery and expansion phase can last for many years. Recovery can be the result of many influences. Businesses can drive economic recovery through revolutionary innovations. Dotcom and internet technology are an example of the innovations driving economic recovery and expansion in the early 21st century.

Laws and regulations can also be important factors in economic recovery. For example, US government regulations and the Dodd-Frank Act were key factors in the recovery from the 2008 financial crisis.

The economic recovery from the financial crisis and economic downturn in 2008 began in June 2009. US real GDP fell 5.4% in the quarter of 2009 and 0.5% in quarter two; started to rise again in the third quarter of 2009. The Down Jones Industrial Average, an  element of  economic performance, has developed for four months after bottoming in February 2009.

By September 2019, the US announced a restoration and expansion period lasting more than 10 years – a record for the country. However, this time is still far from the world record for the time of Australia’s 28-long open period. Most economists and legislators seek to do all they can to help an economy stay in recovery and expansion for as long as possible.