L-shaped recession

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A L-shaped recession describes a recession that falls quickly and fails to recover. An L-shaped recession is a worst-case scenario because they offer no hope of recovery[1].

The Japanese recession that began in the early 1990s is considered an L-shaped recession.

Check out this video describing L-Shaped recessions to learn more.

Other shapes of recession

References

  1. ↑ "Understanding V, U, W, and L-Shaped Recessions" article from Learning Markets
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