Recession shapes or recovery shapes are used by economists to describe different types of recessions and their subsequent recoveries. There is no specific academic theory or classification system for recession shapes; rather the terminology is used as an informal shorthand to characterize recessions and their recoveries. The most commonly used terms are V-shaped, U-shaped, W-shaped, and L-shaped recessions, with the COVID-19 pandemic leading to the K-shaped recession. The names derive from the shape the economic data – particularly GDP – takes during the recession and recovery.
V-Shape: US 1953 recession Percent Change in Real GDP (annualized; seasonally adjusted); Average GDP growth 1947–2009 Source: BEA
U-Shape: US 1973–75 recession Percent Change in Real GDP (annualized; seasonally adjusted); Average GDP growth 1947–2009 Source: BEA
W-Shape: US 1980–82 recession. Percent Change in Real GDP (annualized; seasonally adjusted); Average GDP growth 1947–2009 Source: BEA
L-Shaped: Lost Decade in Japan. Percent Change in Real GDP (annualized; seasonally adjusted); Average GDP growth 1950–2000 Source: Penn World Tables
Nouriel Roubini is a Turkish-born Iranian-American economic consultant, economist, speaker and writer. He is a Professor Emeritus since 2021 at the Stern School of Business of New York University.
Roubini at the Global Governance event of the Monterrey Institute of Technology and Higher Education, Mexico City, 2012