What Is a Recession? Investopedia / Laura Porter A recession is a significant, widespread, and prolonged downturn in economic activity. A common rule of thumb is that two consecutive quarters of negative gross domestic product (GDP) growth mean recession, although more complex formulas are also used. Economists at the National Bureau of Economic Research (NBER)
What Is a Recessionary Gap? A recessionary gap, or contractionary gap, is a macroeconomic term used when a country’s real gross domestic product (GDP) is lower than its GDP at full employment. Key Takeaways A recessionary gap, or contractionary gap, occurs when a country’s real GDP is lower than its GDP at full employment.Recessionary gaps
What Is a Reverse Convertible Note (RCN)? A reverse convertible note (RCN) is a financial product that shares characteristics with both bonds and stocks. A coupon-bearing investment, it offers a payout at maturity which depends on the performance of an underlying stock. Structured as high-yield short-term investments, most RCNs have maturity periods of three months to
What Is Retained Cash Flow (RCP)? Retained cash flow (RCP) is a measure of the net change in cash and cash equivalent assets at the end of a financial period. It is the difference between the incoming and outgoing cash for the period. Retained cash flow includes the remaining cash after an entity uses cash
What Is a Readvanceable Mortgage? A readvanceable mortgage is a type of mortgage that allows the borrower to add a line of credit to the loan, permitting the borrower to re-borrow any part of the principal paid down. It is essentially a primary mortgage bundled with a home equity line of credit (HELOC). Key Takeaways
What Is Reaffirmation? Reaffirmation is a type of agreement a debtor makes with a lender to repay some or all of a debt despite going through bankruptcy proceedings. When a person files for bankruptcy, they do so in order to be relieved of a debt burden they cannot pay. By entering into a reaffirmation agreement
Reaganomics refers to the economic policies of Ronald Reagan, the 40th U.S. president, serving from 1981–1989. His economic policies called for widespread tax cuts, decreased social spending, increased military spending, and the deregulation of domestic markets. These policies were introduced in response to a prolonged period of economic stagflation that began under President Gerald Ford
What Is Re-Aging Debt? Re-aging debt occurs when there is a restart on the clock on an old debt’s statute of limitations. Re-aging debt can happen if a borrower talks to a creditor about an old debt or makes a payment on an old debt. Re-aging debt is good for debt collectors because it gives
What Is a Real Asset? Real assets are physical assets that have an intrinsic worth due to their substance and properties. Real assets include precious metals, commodities, real estate, land, equipment, and natural resources. They are appropriate for inclusion in most diversified portfolios because of their relatively low correlation with financial assets, such as stocks
What Is the Real Economic Growth Rate? The real economic growth rate, or real GDP growth rate, measures economic growth, as expressed by gross domestic product (GDP), from one period to another, adjusted for inflation or deflation. In other words, it reveals changes in the value of all goods and services produced by an economy—the economic
