recession v. depression
Tuesday, March 16, 2010 A recession is a general slowdown in economic activity, and can be visualized as the period from a peak to a trough in a business cycle. A period of increasing economic activity is called expansion.
There aren’t widely accepted rigorous definitions of recession and depression. A nation’s Gross Domestic Product is the total value of all the goods and services it produces in a year. It’s sometimes maintained that a recession is marked by a decline in GDP for two or more consecutive quarters. The National Bureau of Economic Research (NBER) determines when recessions begin and end by tracking rates of industrial production, wholesale and retail sales, employment, and real income.
A depression is a long-lasting, severe recession. One view holds that a country is in a depression when its GDP declines by more than 10% or it experiences a recession lasting at least 2 years. By this measure, the last official depression in the United States was the second wave of the Great Depression, from 1937 to 1938.