Thesis: Indicators of Recession

Sample Thesis Paper

With the history of recession under over economist around the world started to works on the indicators that were the major players in causing recession. The need for this study was to develop an understanding about recession, making predictions about recession and eventually making some arrangements before the recessions (Farago 2002).

In reality it is quiet difficult to predict the economy and there could be multiple factors that can work simultaneously in causing recession. Among the major indicators some of them are given below which include employment, output level, industrial production index (IPI), capacity utilization rate (CUR), interest rates, producer price index (PPI), duration, and consumer price index (CPI).


It is fairly clear that if the unemployment rate of an economy is increasing it means that the economy is heading towards a recession. Reason for this is because when the economy would not produce much they won’t need the work force and eventually it would result in job cuts (Farago 2002).


As we have discussed before output or GDP is the representative of the value of all the total good and services produced in a certain territory in one year. The GDP could be presented in two ways the first one is in terms of money value which would give the picture of the market value of all the goods and services that were produced in that time period. In this kind of calculation inflation is not adjusted which means that that if there is an increase in the general price level it would not show that increase. The other type of calculation shows a much closer picture of the economy reason being in this GDP the inflation rate is adjusted so it shows the ground reality of what is really happening on ground. This is also known as real GDP and it shows the growth in the economy (Farago 2002).

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