Contact Us

If you still have questions or prefer to get help directly from an agent, please submit a request.
We’ll get back to you as soon as possible.

Please fill out the contact form below and we will reply as soon as possible.

  • Courses
  • Find a Job
  • Home
  • Economics, Finance, & Analytics
  • Economic Analysis & Monetary Policy

V Shaped Recovery - Explained

What is a V-Shaped Recovery?

Written by Jason Gordon

Updated at April 24th, 2022

Contact Us

If you still have questions or prefer to get help directly from an agent, please submit a request.
We’ll get back to you as soon as possible.

Please fill out the contact form below and we will reply as soon as possible.

  • Marketing, Advertising, Sales & PR
    Principles of Marketing Sales Advertising Public Relations SEO, Social Media, Direct Marketing
  • Accounting, Taxation, and Reporting
    Managerial & Financial Accounting & Reporting Business Taxation
  • Professionalism & Career Development
  • Law, Transactions, & Risk Management
    Government, Legal System, Administrative Law, & Constitutional Law Legal Disputes - Civil & Criminal Law Agency Law HR, Employment, Labor, & Discrimination Business Entities, Corporate Governance & Ownership Business Transactions, Antitrust, & Securities Law Real Estate, Personal, & Intellectual Property Commercial Law: Contract, Payments, Security Interests, & Bankruptcy Consumer Protection Insurance & Risk Management Immigration Law Environmental Protection Law Inheritance, Estates, and Trusts
  • Business Management & Operations
    Operations, Project, & Supply Chain Management Strategy, Entrepreneurship, & Innovation Business Ethics & Social Responsibility Global Business, International Law & Relations Business Communications & Negotiation Management, Leadership, & Organizational Behavior
  • Economics, Finance, & Analytics
    Economic Analysis & Monetary Policy Research, Quantitative Analysis, & Decision Science Investments, Trading, and Financial Markets Banking, Lending, and Credit Industry Business Finance, Personal Finance, and Valuation Principles
  • Courses
+ More

Table of Contents

What is a V-Shaped Recovery?How does a V-Shaped Recovery Work? V-Shaped Recovery Compared to an L-Shaped RecoveryAcademic Research on V-Shaped Recoveries

What is a V-Shaped Recovery?

A V-shaped recovery is a term that describes a period of economic decline (recession) and recovery that resembles a V shape. This V shape symbolizes a short trough or decline in an economy, followed by rapid recovery, the first stroke of the V shape shows a sharp but short decline while the other stroke indicates a rapid recovery. There are different shapes used by economists to describe different types of recessions and recoveries in an economy such as L-shaped, W-shaped, U-shaped, and J-shaped recovery. In the case of a V-shaped recovery, an economy suffers a sharp decline for a short period and then a sharp rise to its previous status.

Back to:ECONOMIC ANALYSIS & MONETARY POLICY

How does a V-Shaped Recovery Work? 

Different types of economic recovery exist and each recovery is a measure of how healthy an economy is. The V-shaped recovery is otherwise called the V-shaped recession. It is an economic chart that depicts a drastic decline in an economy leading to a short period of recession which is later overthrown by a sharp economic recovery. Economists developed the V-shaped recovery chart and other charts after evaluating the overall health of an economy considering growth signals such as industrial output, gross domestic product, employment level, and other factors. In the United States, the 1953 recession is an instance of a V-shaped recovery in which the economy recovered from recession through the activities of consumers such as demand and spending.

V-Shaped Recovery Compared to an L-Shaped Recovery

V-Shaped recovery is characterized by a sudden economic decline followed by rapid economic growth. The case is different with L-shaped which is characterized by a sharp economic decline then a slow pace of recovery in an economy. There are many factors that contribute to a decline (recession) in an economy which includes monetary policies. The L-Shaped Recovery or recession is often described as the most dramatic recession given that there is slow economic growth or recovery after a steep recessionary period. Generally, countries of the world experience recessions and recoveries at different points and the duration with which the recession lasts before a recovery takes place determines the shape of the recovery. 

Related Topics

  • Economic Cycle 
  • Business Cycle
  • Boom and Bust Cycle
  • Skyscrapper Effect (Economics)
  • V-Shaped Recovery
  • W-Shaped Recovery
  • U-Shaped Recovery
  • Kondratieff Wave Cycle
  • Contagion


v shaped recovery v-shaped recovery

Was this article helpful?

Yes
No

Related Articles

  • Structural Unemployment - Explained
  • Disequilibrium (Economics) - Explained
  • Command Economy - Explained
  • Closed Economy - Explained



©2011-2023. The Business Professor, LLC.
  • Privacy

  • Questions

Definition by Author

0
0
Expand