Do recessions matter? One common definition of recession is "two consecutive quarters of negative GDP growth". GDP growth affects other variables, such as stock prices, interest rates, unemployment, and personal income. Has research found there to be a nonlinearity such that GDP growth falling from 0.5% to -0.5% has a bigger effect on other variables than GDP falling from say 1.5% to 0.5%?
Not all components of the economy vary with the same intensity. As you can see in the figure below, consumption is about as volatile as output (GDP), but investment is much, much more volatile. You can also see the grey bars, which indicate NBER recession dates for the US, line up nicely with these dips in investment.