What's the difference between a recession and a depression?

Question

What's the difference between a recession and a depression?

Answer 1

A recession is when your neighbor loses his job.

A depression is when you lose your job.

                The difference between the two terms is not very well understood for one simple reason: There is not a universally agreed upon definition.

The standard newspaper definition of recession is a decline in the GDP for two or more consecutive quarters.

The Business Cycle Dating Committee(BCDC) define ---

a recession as the time when business activity has reached its peak and start to fall until the time when business activity bottoms out. When the business activity start to rise again it is called an expansionary period. By this definition , the average recession lasts about the year.

Before the Grate Depression of1930s any downturn in economic activity was referred to an depression . The term recession was developed in this period to differentiate period like the 1930s from smaller economic declines that occurred in 1910 and 1913 . This leads to the simple definition of depression as a recession that lasts longer and has a longer decline in business activity.

A good rule of thumb for determining  the difference between a recession and depression is to look at the change in  GNP. A depression is any economic downturn where real GDP declines by more than 10%. A recession is an economic downturn that is less severe.

Answer 2

I recession is usually a relatively short-term economic downturn, often roughly defined as analogous to two consecutive quarters of a declining growth rate.

The term depression generally refers to a prolonged period of economic crisis.

Answer 3

Recession

http://en.wikipedia.org/wiki/Recession

Depression

http://en.wikipedia.org/wiki/Depression_...

Jim

⌘ http://www.life-after-harry-potter.com ⌘