Tuesday, October 27, 2015

Economic Recession: A Wake Up Call (part 1 of 2)


Economic recession is an event that nobody seems to be happy hearing.  Every time recession is being mentioned in casual conversations, it seems that everybody participating shudder in fear anticipating the worst.

An economic recession is an economic slowdown that happens in two consecutive quarters.  Some economists would say that this is associated with series of events that generally recognized to be “market correction”.  What is this series of events?

An economic recession happens when there is more supply than the actual demand of the product.  This leads to a decline in the gross domestic product.  What happens during economic recession is that it provides a “cooling off” period for creating on new products that will interest the consumers and of necessity.

When compared to agriculture, it is common sense among farmers that the land needs an time interval between the harvesting season and next planting season.  Sometimes farmers would plant a different kind of seed that is known to bring and enrich the land again for the next planting season.  Somehow this applies in financial and trade markets.

Some businesses would see economic recession as the time to reinvent.  Time to innovate and create new products that will create a market hype and again will encourage consumers to purchase goods.  Many businesses who have switched their attention in innovating during economic recessions show high probabilities of succeeding.

Since there is a large selection of products in market trying to capture the unmindful consumers, the period of recession accelerates the quality of products being available in the market.  Since companies are trying to get the consumer’s money, they would likely to produce improved product quality, improved services at lower prices.

Since there are products that would not sell, this would push companies and sellers to inspect their production methods.  This is a good time in filtering out production methods and equipment that compromises the quality, efficiency and speed of creating products.

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