The Italian economy is reported to have slipped back into recession in the first part of 2014.

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Whereas one cannot say whether one criterion is superior to the other, announcing a recession has further implications.

Italians and the world have now been told that their economy slipped back into recession in the first half of 2014.

This characterisation is based on the criterion for recession that is standard in Europe and most countries – two successive quarters of negative growth.

But this is not the only way to identify recessions. Real GDP in Italy, 2007 (Q1) – 2014 (Q2) Why it matters These issues sound like minor technical details.

Economists in general define a recession as a period of declining economic activity.

In the US, the arbiter of when recessions begin and end is the Business Cycle Dating Committee of the NBER.The NBER Committee does not use that rule of thumb, nor any other quantifiable rule when it declares the peaks and troughs of the US economy.But they are not necessarily without real importance.Citizens in Italy have now been given the impression that they have entered a new recession.The same is true of other countries in the European periphery, making investor enthusiasm for their bonds over the last two years puzzling.Recession criteria What is the difference in criteria anyway?