posted on 06-06-2019

Negative Growth

Updated October 1, 2019

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.