* Due to some reason, economic activity start declining, GDP start coming down.
* Central Bank lowers interest rate, making money cheaper to try bring life back to the economy
* Companies start to restructure their debt and raise capital to increase productivity.
* Companies will streamline their procedures to maintain positive profit margins,
* Easiest way is through labor layoffs (since labor is normally the most expensive element).
* Layoffs resulted with an increase in unemployment rate.
* Due to the decline in economic activity throughout the market, these workers cannot find another job.
* Disposable income becomes tight, as job security is at risk.
* Consumer confidence in the market drops, resulting in a decrease in consumer spending
* The lower disposable income translate to lower sales which makes the recession felt by the companies.
* The cycle continues......
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