Psychological Impact of RecessionShahrukh Taghvaei
What is a Recession? A recession is a negative economic growth for two ormore consecutive quarters General slow down in economic activity Recessions generally occur when there is awidespread drop in spending Solution: government should spend more while theprivate sector is spending less, the support ofemployment while those debts are paid down iscrucial
The severity and impact depends on how vulnerableand exposed the respective economies have beenwith the US economy The National Bureau of Economic Research, orNBER, is considered the official arbiter of recessions The last recession ran from March 2001 throughNovember 2001 21 recessions in the 20th century
“Years ago people who sacrificed their sleep, family,food, laughter and other joys of life were called„Soldiers‟ but today they are called „Shareholders‟”
Impact of Recession1. Unemployment2. Fall in productivity3. Opportunities for anti-competitive mergersExample; the suspension of ’competition policy’ inthe United States in the 1930s may have extendedthe Great Depression4. People dependant on wages and salaries are moreaffected than those who rely on fixed income owelfare or benefits5. Negative impact on health and well-being of people
Psychological Impact of Recession “The psychological downturn, especially whencombined with the current economic recession, is farworse than the 2001 economic slowdown, and itscause is not explained by outside factors like mediabias or bickering between impotent “leaders.” Thissense of pessimism is rooted in the profound andsustained feelings of vulnerability that many peopleare experiencing. Anxiety, depression, and a senseof being powerless are a poisonous mix. The tragedyis that focusing on fears only reinforces them. Inunderstandable but irrational ways, people who arefrightened move ever forward toward panic. In thisway, a psychological recession is self-fulfilling.” –Judith Bardwick
A growing sense of frustration, uncertainty,disappointment, and ineffectiveness, often describedas a sense of losing control. Increasing tiredness, confusion, and malaise, feelingpunchdrunk with too many problems to solve. A feeling of personal isolation from family and friendsat home and work. A sense of inadequacy in family life due to lack oftime/money to maintain former lifestyles. A personal dilemma between the temptation to quitor give in to despair, and the courage or “bottle” ittakes to hang on and keep trying.
No motivation or incentive to work Less efficiency in the quality of work