There are many ways to evaluate the impact of a recession on a country. Some claim that the impact is minor because the duration of a recession is shorter than a depression. This claim is disputed, and some feel that a recession, usually defined as no more than a 10% drop in the gross domestic product for at least two back-to-back quarters of a year and less dramatic than the circumstances of a depression, still has long-reaching effects. Recovering from a recession doesn’t mean all businesses, governments, or individuals recover, and sometimes the interventions that stimulate recovery lead to undesirable consequences.

The immediate impact of a recession on a country is felt on a number of levels. It can affect either average spending or luxury spending. It may raise or lower housing prices. Worker salaries typically go down and some jobs are permanently lost. Economists have noticed that even as the country is recovering, certain areas of spending may remain unstable, and there is instability in the market place with sudden spikes or dips in stock values and other investments.

Governments are often directly involved in minimizing the impact of a recession on a country. They may borrow to shore up markets or to offer more assistance to adversely affected people or companies. This borrowing may mean future cuts in vital programs or it could be something that then becomes the responsibility of taxpayers. It isn’t free and borrowing eventually has a cost for the country, the government, and its people.

This last example is something called scarring, and it is increasingly recognized that the impact of a recession on a country is this scarring or costs that eventually must be paid, sometimes far in the future. Some financial experts have discussed the long term impact of recession on education, from pre-school to university level, where forced cuts minimize educational opportunities for others, for life. These may come in the form of cuts schools must make or reductions in program access, but it also occurs because individuals with less money can’t invest to the same degree in their children’s educations.

On the example of education alone, it’s easy to see how the impact of a recession on a country can be long lasting. Fewer educational opportunities mean less chance of moving into career fields that pay well, which means some people remain in lower below middle class for life. This can then burden the state with higher demand for social services, and thus need to borrow additional funds or make decisions to ignore the needs of a cross-section of society, worsening the problem. Such an example suggests that impact may last far beyond a current recession, and become multi-generational in scope.

In the short-term, the impact of a recession on a country is typically changes in prices of goods and services, which may rise or fall. Decrease in jobs is another common element. Market stability, companies holding onto money instead of investing it, and most people and industries having less to spend may result. Though these characteristics may improve over time, in the long-term, a country may be scarred by its downfalls, and for some, lives and opportunities change dramatically, or even political and economic emphasis shifts to adjust to new dynamics.