LONDON, England - December 23, 2008 - The technical definition of a recession was drawn up on the back of an envelope and was a piece of political spin, a former ambassador to the U.S. has claimed.

Peter Jay, who was Britain's envoy to Washington between 1977 and 1979, said that the definition - two consecutive quarters of negative growth - had no basis in economic theory and was created by the U.S. government in 1967 to aid the re-election prospects of President Lyndon Johnson.

Mr. Jay, who said he was in the room when the definition was established, said that Art Okun, the chairman of Johnson's economic council, acted upon indications that there might be a recession that year, which he feared would dent the President's popularity.

He said, "Art had the neat idea that if we had a definition of recession that meant that people could say we are not actually in a recession, not technically, that would get the president out of a difficulty. So on the back of an envelope he invented the idea that in order to call it a recession you had to have two consecutive quarters of negative growth."

Mr. Jay, who went on to become the BBC's economics editor, said, “This was completely arbitrary - there was absolutely nothing scientific or in the economic theory that requires that a recession be defined in that way. It was just a neat device by a clever economist trying to help his chief who was faced with a political challenge.

“It's entirely spin, entirely semantics. The whole argument, about are we or are we not in recession, is completely barmy. The rest of the world, in this as in so many things - often for good reasons - follows the United States. Because it is big and important and dominates English language economics, the world feels it has to follow.”