A recession is commonly defined as two or more quarters of negative growth in real GDP. But that’s a silly rule – and it isn’t used in the US, where the body which officially delineates recessions last month said that the 2020 recession lasted just two months. If the bushfires of late 2019 and early 2020 hadn’t happened, Australia wouldn’t have had two consecutive quarters of negative growth last year .. but would we really have pretended that one quarter of negative growth didn’t constitute a recession even though it was the largest contraction in economic activity since the Great Depression?

Last year’s recession was one which, in Paul Keating’s notorious phrase, Australia “had to have”. The one we might well be having now – even if it isn’t characterized by two consecutive quarters of negative real GDP growth – is not. It’s the result of poor choices by the Federal and NSW Governments.

2021-08-15 A second recession