Recessions have become ultra-rare. That is storing up trouble

Subscribe to enjoy similar stories. From 1300 to 1800, economic historians estimate that England and then Britain were in recession almost half the time. The economy was volatile, with storming recoveries following crashing downturns.

As capitalism matured and policymaking improved, recessions became less frequent. In the 19th century the country was in recession only a quarter of the time, a share that fell lower still in Britain and other rich countries in the 20th century. Today things are even more placid: recessions have become an endangered species.

In the past four years the world has faced challenges of unusual scope, from higher interest rates and banking crises to trade wars and hot wars. Yet from 2022 to 2024 global real GDP growth was 3% a year on average, and the economy looks set to grind out another 3% this year. Unemployment in the OECD, a club accounting for 60% or so of global GDP, remains near historical lows.

In the third quarter of 2025 global company profits rose by 11% against a year earlier, the most in three years. Aside from a contraction owing to covid-19 lockdowns, the world economy has not suffered a synchronised recession for over 15 years (see chart 1). Perhaps a third of America’s workforce has never experienced a prolonged downturn.

This is good news: slumps exact a tremendous human cost. Yet there is a catch. When the world lives through a “recession recession", costs begin to mount.

Some suggest an economy needs the occasional downturn to stay healthy. Joseph Schumpeter, an Austrian economist, argued that they provoke “creative destruction". Failing firms leave the market, capital decamps to more promising technologies and workers move to more productive jobs.