U, V and W Recovery
- June 24, 2020
- Posted by: OptimizeIAS Team
- Category: DPN Topics
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Subject: Economy
Context:
Analysts suggested that India’s economic recovery from COVID pandemic is more likely to be a ‘U’ or ‘W’ shaped rather than ‘V’.
Concept:
- Economic recession and recovery are often charted in the most common shapes such as U, V and W.
- A U-Shaped Recovery represents the shape of the chart of certain economic measures, such as employment, GDP and industrial output. It is also charted when the economy experiences a gradual decline in these metrics followed by a gradual rise back to its previous peak.
- A V-shaped recovery is characterized by a sharp economic decline followed by a quick and sustained recovery. This type of recession tends to be considered a best-case scenario.
- W-shaped recessions begin like V-shaped recessions but turn down again after false signs of recovery are exhibited. It is also known as double-dip recessions, because the economy drops twice prior to full recovery.