This is the Cato Daily Podcast for Tuesday, August 9, 2022.

I'm Caleb Brown.

The definition of recession is a long-standing political fight,

but recessions are not always identified in the moment.

So when social media companies decide to weigh in and punish those who are using the wrong

words, it's hard to say they have credibility to do so.

Cato's Ryan Bourne and John Samples detail how economists think

about recessions and how social media companies ought to respond. Ryan, let me start with

you. The definition of a recession you mentioned before we started recording

is con seemingly constantly a matter of debate and it's only when we're actually on the verge of one when political

interests get involved that people really really care about the the

definition of a recession either to say we're not in one or to say that we are in one.

But people generally understand that a not quite temporary downturn in economic activity.

So help us understand sort of the finer points of trying to say, well, the

recession starts here, it ends here, or is it just not that simple? The difficulty has always been that there's no hard and fast definition of a recession.

Technically, the way that the media has kind of referred to it over time has tended to to take the

judgment of the National Bureau of Economic Research's Business Cycle Dating Committee for kind of an official word on this and they kind of

define a recession as a significant decline in economic activity that is spread across the economy and lasts for more than a few months.

So it tends to be quite deep, quite diffuse and long enough to constitute a meaningful downturn.

Now the problem with that has always been that quite often those periods are only defined retrospectively, so it doesn't really help you when you're considering whether there should be a kind of policy response in the near term.

And so you look for signs and signals of a recession to kind of help you through that thought process.

And I think the difficulty here is that as a proxy for that

...