Why Recessions Are Not about Declining GDP

Most economic commentators see decline in GDP as indicative of a decline in the health of the economy.

Experts recommend lowering of interest rates by increasing the growth rate of money supply to pull economy out of slump.

Frank Shostak : A recession is not really a weakening of GDP and various other economic indicators, but the liquidation of non-productive activities that emerged on the back of the loose monetary policies of the central bank.

Frank Shostak argues that policies aimed at preventing the emergence of a recession make things much worse.

He argues that inflationary policies of the central bank (which strengthens GDP) are regarded by most experts as a success.

Once the ability of wealth-generators to support overall economic activity weakens, the economy is starting to slide into a recessionary hole.