With a return to output growth, the recession defined as two consecutive quarters of economic contraction is officially over.

First, the eurozone is in deep recession, especially in the periphery, but now also in the core economies, as the latest data show an output contraction in Germany and France.

The contraction applies not only to output and employment, as in a normal recession, but to debt and credit, and the deleveraging that typically takes many years to complete.

China s Inscrutable Contraction

The Second Great Contraction

Fiscal contraction is contractionary, period.

The Great Contraction of 2008 2009

After many years of contraction, investment in construction also will rise slightly.

But, in a Great Contraction, problem number one is too much debt.

Then We draw it in towards Ourselves , a contraction by easy stages .

This will raise actual output to the level of potential output, thereby closing the output gap.

This contraction has become even more severe since then.

Output

Output

This threatens to aggravate the damaging contraction of global trade.

Following the German economy s sharp contraction in the last quarter of 2012, the question for the country today is whether it can avoid a technical recession (defined as two consecutive quarters of economic contraction).

Output intensity.

Output device

The ensuing losses will aggravate the financial turmoil and economic contraction.

But Keynesianism involved continued fiscal expansion, with no offsetting monetary contraction.

The maximum rate of economic contraction a veritable freefall came in the last quarter of 2008.

In 2004, for example, Chad s 39.4 annual growth rate contrasted sharply with Zimbabwe s 6.8 economic contraction.

In contrast, QE3 will be associated with a fiscal contraction, possibly even a large fiscal cliff.

Growth in high end services employment is matched by contraction in high employment components of manufacturing supply chains.

Second, in 2001, weak capital spending in the corporate sector (accounting for 10 of GDP) underpinned the contraction.

Minimal output intensity.

Maximal output intensity.

The period of gravitational contraction lasts about 10 to 15 million years.

All of this, according to Reinhart and Rogoff, involves a protracted and pronounced contraction in economic activity.

Nevertheless, the legacy of the huge contraction in credit is not likely to go away anytime soon.

At the same time, it spares an already weak economy damaging fiscal contraction in the short run.

Okay, so it causes a small involuntary contraction in my hand by putting a magnetic pulse in my brain.

Forecasters assumed that monetary expansion would provide an effective antidote to fiscal contraction.

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Default likely would be accompanied by severe economic contraction Argentina s GDP fell 15 after it defaulted in 2002.

In response, China s export performance swung from 26 annual growth in July 2008 to a 27 contraction by February 2009.

Annual output per person, adjusted for price levels in different parts of the world, averages around 10,000, implying total output of around 67 trillion.

But what we have seen since 2007 is an overshooting of the contraction in consumer demand and domestic investment.

A sharp contraction in jobs and labor income has many negative consequences on both the economy and financial markets.

But it left China in a deepening hole increasingly deficient in jobs per unit of output, it needed more units of output to absorb its surplus labor.

A significant equity price correction could, in fact, be the force that in 2013 tips the US economy into outright contraction.

While aggregate output fell in 2009, it recovered extremely fast.

Obviously, moderation in output movements did not occur everywhere simultaneously.

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Output version information and exit