Originally Posted by
Koyote
"Contraction" generally describes a reduction in overall economic activity as measured by variables such as GDP and Unemployment Rates. Casually speaking, though,
mstateglfr is correct: it doesn't matter whether the economy is returning to "normal" (whatever
that means) levels of activity or subnormal levels of activity. Job loss = contraction.
Knowing
why there was a "contraction" is useful information. He's only "correct" if your goal is a lack of understanding.
It certainly "matters" whether that contraction is a return to normal levels or subnormal levels. Since, obviously, one is better than the other.