Recession primer

Heather Stewart writing in the Observer draws parallels with previous recessions and suggests that vastly over-inflated private sector debt will be the main cause of a painful recession and a return to the boom and bust days of the 1980s and 1990s. Three useful A2 macro concepts work their way into her primer at the end of the article:

Correction - however much you thought your home was worth, you were wrong.

Deleveraging - banks that have made risky loans trying to get their finances back in order by lending less and asking for more cash from shareholders.

Spare capacity - that means higher unemployment, mothballed factories and empty shops and offices.