Page "Recession" Paragraph 6

Economist Richard C. Koo wrote that under ideal conditions, a country's economy should have the household sector as net savers and the corporate sector as net borrowers, with the government budget nearly balanced and net exports near zero.

When these relationships become imbalanced, recession can develop within the country or create pressure for recession in another country.

Policy responses are often designed to drive the economy back towards this ideal state of balance.