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Recession por Mind Map: Recession

1. Excess supply in labour market (unemployment)

1.1. falling real wages

1.1.1. real exchange rate depreciation

2. Asset price bubble

3. Excess demand in labour market

4. Excess demand in product/services markets

4.1. pro-cyclical incomes policy

4.2. pro-cyclical fiscal policy

4.3. pro-cyclical monetary policy

4.3.1. Euro membership

5. Increased foreign debt

5.1. currrent account deficit

5.1.1. increased household debt

5.1.2. real exchange rate appreciation

6. Real wage inflation

7. Budget deficit

7.1. pro-cyclical fiscal policy

8. inflation