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K-shaped recovery UPSC NOTE

 Why in news

  • An uneven K-shaped recovery in economic growth is also fuelling a similar trajectory for inflation dynamics, with food and rural price rise outpacing the inflation in other goods and services, and that faced by urban consumers, respectively, HSBC researchers said

Economic recovery

  • Economic recovery is the business cycle stage following a recession that is characterized by a sustained period of improving business activity.

  • Normally, during an economic recovery, GDP grows, incomes rise, and unemployment falls and as the economy rebounds.

  • Economic recovery can take many forms, which is depicted using alphabetic notations. For example, a Z-shaped recovery, V-shaped recovery, U-shaped recovery, elongated U-shaped recovery, W-shaped recovery, L-shaped recovery and K-shaped recovery.

K-shaped recovery

  • A K-shaped recovery occurs when, following a recession, different parts of the economy recover at different rates, times, or magnitudes

  • This is in contrast to an even, uniform recovery across sectors, industries, or groups of people.

  • A K-shaped recovery leads to changes in the structure of the economy or the broader society as economic outcomes and relations are fundamentally changed before and after the recession.

  • This type of recovery is called K-shaped because the path of different parts of the economy when charted together may diverge, resembling the two arms of the Roman letter "K."

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Learnerz IAS | Concept oriented UPSC Classes in Malayalam: K-shaped recovery UPSC NOTE
K-shaped recovery UPSC NOTE
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Learnerz IAS | Concept oriented UPSC Classes in Malayalam
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