Policy makers may not know that the economy is in a recession until six months after the recession starts; this is a phenomenon known as the

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The recognition lag refers to the delay that occurs between when a recession begins and when policy makers recognize that the economy is in a recession. It can take several months for economic data to be collected, analyzed, and reported, which means that policy makers may not realize the severity of a recession until it has already begun to have significant negative effects on the economy. A six-month recognition lag is not uncommon.

Policy Makers May Not Know That the Economy Is in a Recession