K-Shaped Recovery
Syllabus: GS-III
Subject: Indian Economy
Topic: Indian Economy and issues relating to Planning, Mobilization of Resources, Growth, Development and Employment.
Why in the news?
SBI’s Economic Research Department published a report debunking notions of a K-shaped post-pandemic recovery.
What is economic recovery?
Economic recovery refers to the phase of the business cycle following a recession where the overall economic activity begins to improve and move towards expansion.
Key characteristics of an economic recovery:
- Increased Gross Domestic Product (GDP)
- Rising incomes and consumption
- Decreasing unemployment
- Stabilized financial markets
There are different ways to categorize economic recoveries, but one common way is by their shape on a graph.
Types of economic recovery
K-shaped recovery
A K-shaped recovery refers to a scenario where different segments of an economy recover at different speeds, following a slowdown or recession.
The term prominence in 2020 and 2021 in the wake economic slowdown accompanied with the COVID-19 pandemic all over the world.
The letter “K”, with one arm going up and the other going down is the visual representation of this phenomenon.
