Spring Garden Road was bustling on that day in 2013. But if you’d visited the stores in 2009, the scene wouldn’t have been quite as cheerful. That’s because Nova Scotia’s economy, along with that of Canada as a whole, was depressed in 2009: in late 2008, businesses began laying off workers in large numbers, and employment didn’t start bouncing back until the fall of 2009.
Such troubled periods are a regular feature of modern economies. The fact is that the economy does not always run smoothly: it experiences fluctuations, a series of ups and downs. By middle age, a typical Canadian will have experienced two or three downs, known as recessions. (The Canadian economy experienced serious recessions beginning in 1982, 1990, and 2008.) During a severe recession, hundreds of thousands of workers may be laid off.
Macroeconomics is the branch of economics that is concerned with overall ups and downs in the economy.
Like market failure, recessions are a fact of life; but also like market failure, they are a problem for which economic analysis offers some solutions. Recessions are one of the main concerns of the branch of economics known as macroeconomics, which is concerned with the overall ups and downs of the economy. If you study macroeconomics, you will learn how economists explain recessions and how government policies can be used to minimize the damage from economic fluctuations.
Despite the occasional recession, however, over the long run the story of the Canadian economy contains many more ups than downs. And that long-