Why a weakened economy leads to a permanently weakened economy

A weakening of the economy in a recession subsequently leads to a permanently weakened economy, for several reasons: The decline in employees' employability, due to the transition to unemployment and the change in the economy's sectoral structure that makes certain skills obsolete; The decline in corporate investment, and therefore the fact that less capital (and less technological capital) is available; The deterioration in companies' balance sheets (reduced equity, increased debt); In certain cases, an increase in the tax burden required to restore fiscal solvency; The shift in the economy's structure towards less productive sectors.