Most of you are probably aware that a lot of the countries are increasing their official interest rates in order to fight inflation.
Interest is an expense for the companies and individuals, thus an increase in the interest rate will reduce companies profits and cut individuals dispensable incomes. It will indirectly increase the unemployment rate and reduce total consumption in the economy.
Recession has traditionally been viewed as undesirable. However, recession is also essential for a healthy economy.
Low interest rate is like Junk food - it's delicious & addictive. But if an economy binge long enough on it, it will become 'obese' and unhealthy. Cheap money creates bubble and jobs that should not be there in the first place.
Ideally, increase in the interest rate will chase money out of those 'unproductive' companies and industries - especially those that add no additional value to the society and release those resources to those that create real value. As such, money will be lost from the former, people will lose their jobs from those fields too. However, in the long run, the money and labour force will be re-located to more effective and constructive companies and industries.
Recession is in fact, creating a more efficient economy!
So what's your take on this?