The nature and causes of recessions are simultaneously obvious and uncertain. Recessions can result from a cluster of business errors being realized simultaneously. Firms are forced to reallocate resources, scale back production, limit losses and, sometimes, lay off employees. Those are the clear and visible causes of recessions. It is not clear what causes a general cluster of business errors, why they are suddenly realized, and how they can be avoided. Economists disagree about the answers to these questions and several different theories have been offered.
The nature and causes of recessions are simultaneously obvious and uncertain Recessions can result from a cluster of business errors being realized simultaneously. Firms are forced to reallocate resources, scale back production, limit losses and, sometimes, lay off employees. Those are the clear and visible causes of recessions.