We don't think the definition of recession works this way

The Guardian tells us that there’s an interesting definition of not being in recession:

Britain’s economy entered the deepest recession since records began after shrinking by more than in any other major nation in the second quarter. GDP fell by 20.4% after a decline of 2.2% in the first quarter. Economists consider two consecutive quarters of shrinking GDP as the technical definition of a recession.

Growth rapidly recovered after the lifting of lockdown restrictions over the summer, helped in August by the government’s “eat out to help out” restaurant discount scheme, putting the UK on track for the fastest growth in the G7 in the three months to September.

However, analysts said the recovery would probably stop as restrictions are reintroduced and infections climb, ensuring that the country remains in recession until at least next year. Two quarters of positive growth are required to confirm a technical exit from recession.

The deepest recession among others part we’ve already dealt with. ONS has, uniquely among statistical agencies, included the loss of output from the government health care and education systems.

However, it’s that two quarters of positive growth required to not be in recession that we think to be wrong. That’s certainly not the definition that was used in the recent past when there were worries, 5 and 10 years ago, about double dip recessions and all that. One quarter of positive growth was all that was deemed necessary for us not to be in recession.

There is also the point that if we accept this two quarter definition then every recession must last at least a year - two quarters of negative growth to be one, then another two quarters of positive growth before we can declare we’re out of it. And no, recessions are not all of 12 month minimum length.

Finally, there is the point that if this is true then the recession is going to last until next year anyway. The second quarter had negative growth, like the first, and under this two quarter definition whatever happens to growth in the third and fourth we’d still be in recession at the beginning of next year. That is, if it is the true definition then what The Guardian is telling is not news it’s simply a logical certainty.

Finally, finally, there’s the point that we generally regard this whole thing as being binary - most unfashionable though that is concerning social matters these days. We are either in recession or not. If our definition of recession is declining growth for two quarters in a row - which it is - then one quarter of positive growth must be non-recession. For it isn’t meeting that definition of two of negative. We also don’t have the third word, the third state, somewhere inbetween recession and not-recession.

We really do think this definition of recession being used is incorrect.