As Canada awaits the release of economic data expected to determine if it has been in a recession, Assistant Professor Mike Moffatt points out that the issue of identifying a recession is more complex than that.
In fact, the debate of whether or not there was a recession in 2015 will not end on Tuesday, September 1, when Statistics Canada will release a much anticipated report to determine if Canada was in a statutory recession in the first half of 2015.
A statutory recession is defined, according to the Federal Balanced Budget Act, as a period of at least two consecutive quarters of negative growth in real gross domestic product.
In his op-ed for Canadian Business, Moffatt explained why the recession dispute of 2015 might continue for some time.
“There are a number of ways that Tuesday’s release could fail to show two consecutive quarters of declining real GDP,” he said. “Future revisions to GDP data could mean that six or 12 months from now we are revised into or out of a recession.”
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