THE EFFECTS OF ECONOMIC RECESSION

   Many developed and developing countries suffer from economic recessions. Economic recessions are a term of general economic decline. It is thought that economic recessions can occur due to many factors like high-interest rates and an increase in inflation for example. Economic recessions have various effects on business and society, and the impacts of a recession depend on how long it lasts and the depth of the fall in output.

  Initially, one of the important effects of economic recessions is unemployment. For example, many companies can dismiss some of the workers in order to reduce cost and combat the recession, and some firms go bankrupt, which causes all workers to lose their jobs. Therefore, the unemployment rate rises gradually. And this also affects families or individuals whose income is drastically reduced due to loss of employment and underemployment.

      Finally, economic recessions also have adverse impacts on society.

When people are out of work, they are unable to meet their needs, and this causes the pressure on demands for government-funded social services to increase. However, governments also experience drops in revenue collection during the recession; hence, it becomes difficult to meet the increased demands on social services. Furthermore, the social effect of the economic recession is family problems. With the loss of a job, many families experience many economic problems. For instance, they cannot defray the educational cost of their children, and their lifestyles change because of a lack of funds.

    To conclude, many countries are hit by economic recessions because of a more than normal drop in spending by both the private and public sectors. Economic recessions have negative impacts on every part of life. Accordingly, people and governments should take the necessary measures to escape from them.

HİLAL BAYIRLI