An economic recession is a critical situation in which a country suffers a drop in production of the Gross Domestic Product, therefore this decrease leads to nervousness on the part of investors, therefore the recession increases and the country enters an economic crisis. Simply put, the recession could begin and fuel when investors constantly pump capital into producing companies. As there are no resources, there is no product, there is no sale, shortages arrive and finally fall into an economic depression.
However, recessions are avoidable, since there are certain indicators with which a possible recession in the country can be predicted, the most important of all is the increase in the unemployment rate, which in turn produces a decrease in consumption and so on. Massive staff cuts indicate that companies do not have the strength to produce and lift production, capital injections are nervous to the point that they cease.
Other “symptoms” that are worth highlighting of a recession are: increase in the past-due loan portfolio, greater restrictions on the part of banks to award credit, decrease in consumer capacity; increase in the overdue loan portfolio, due to the inability to pay of the debtors, the increase in interest rates.
In 2010, the United States suffered a great recession, the main cause of which was the war against Iraq in the countries of the Middle East. This warlike conflict led the banks to bankruptcy, the Wall Street collapsed as well as many economies that depend on the United States as well.
