Negative Growth

Written By
Paul Tracy
Updated August 5, 2020

What is Negative Growth?

In economics, negative growth usually refers to shrinking gross domestic product (GDP).

How Does Negative Growth Work?

For example, if the United States' GDP falls from $14.4 trillion to $14.1 trillion, we would say that the U.S. economy exhibited negative growth.

Why Does Negative Growth Matter?

Negative growth is the prelude and measurement of recessions or depressions. In particular, the traditional definition of a recession is negative growth in GDP for two or more consecutive quarters.