Inflation is the loss of purchasing power of the currency that results in an increase general and sustainable prices.
And Recession is a period of temporary economic decline during which trade and industrial activity are reduced, generally identified by a fall in GDP in two successive quarters.
From https://www.insee.fr/en/metadonnees/definition/c1473 Match much more the common definition.
It might have a relation to cash demand in certain contexts, but the link is not definitional : inflation and recession are defined by symptoms, not causes.
- "Loss of purchasing power" is a fancy way of saying "people don't want your money as much as they used to", i.e. low demand for cash.
- Similarly, "economic decline during which trade and industrial activity are reduce" are complicated words for "people more and more prefer to hold on to the money they have rather than exchange it for other stuff", i.e. increasing demand for cash.
The reason I phrased it the way I did is that it helps highlight how a recession is the way out of inflation.
Huh? If demand for cash rises a lot, but we are printing lots of money, too, to satisfy that demand; and everything else stays stable, by your definition you would call that a recession?
