Modern Economic Nonsense — An engineering recession

There is a difference between a recession and a slowdown. A recession is when the economy contracts for two straight quarters, not just one. A slowdown happens when the economy grows slower than usual. An engineering recession is when the central bank purposely slows down the economy to fight for issues such as inflation. It’s not that economy has any problems caused by any factors but a political movement to sustain the economy through battle inflation caused by the ongoing war. And the further question is how long this can be sustainable until? It is a tricky question because it depends on how long the war can drag on and what outcome both sides of the country will accept.

How does the central bank slow down the economy?

The central bank can slow down the economy by raising interest rates. When the economy is growing too quickly, the central bank will raise interest rates to slow down the pace of growth. Raising interest rates makes it more expensive for businesses to borrow money, making them less likely to expand. Conversely, when…