<p>Recession, in macroeconomics, is a period of temporary economic decline during which trade and industrial activity slow down, generally identified by a fall in GDP in two successive quarters.</p>

<h2>How It Works</h2>
<p>A recession occurs when the economy experiences a decline in economic activity, typically measured by a decrease in GDP. This decrease is usually accompanied by other indicators such as a rise in unemployment, a decrease in consumer spending, and a decline in business investment. The National Bureau of Economic Research (NBER), the official arbiter of U.S. recessions, defines a recession as a significant decline in economic activity that is spread across the economy and lasts more than a few months. The most recent recession in the U.S., for instance, lasted from December 2007 to June 2009.</p>

<h2>Why It Matters</h2>
<p>Recessions matter because they have significant impacts on individuals, businesses, and governments. During a recession, unemployment typically rises, which can lead to increased poverty and income inequality. Businesses may struggle to stay afloat, leading to closures and job losses. Governments often see a decrease in tax revenue, which can limit their ability to provide services and support those in need. Additionally, recessions can have long-lasting effects, such as reduced productivity and lower potential output for the economy. Therefore, understanding and managing recessions is a key goal of economic policy.</p>