here is an old joke among economists that states: A recession is when your neighbor loses his job. A depression is when you lose your job.
Prior to the Great Depression of the Protected content any downturn in economic activity was referred to as a depression. The term recession was developed in this period to differentiate periods like the Protected content from smaller economic declines that occurred in Protected content 1913. This leads to the simple definition of a depression as a recession that lasts longer and has a larger decline in business activity. A good way to tell the difference between a recession and a depression is to look at the changes in GNP. A depression is any economic downturn where real GDP declines by more than 10 percent. A recession is an economic downturn that is less severe.
Using this as a yardstick, the last depression in the US was from May Protected content June Protected content , where real GDP declined by 18.2 percent. If we use this method then the Great Depression of the Protected content can be seen as two separate events: an incredibly severe depression lasting from August Protected content March Protected content real GDP declined by almost 33 percent, a period of recovery, then another less severe depression of Protected content . The United States hasn’t had anything even close to a depression in the post-war period. The worst recession in the last 60 years was from November Protected content March Protected content , where real GDP fell by 4.9 percent. Countries such as Finland and Indonesia have suffered depressions in recent memory using this definition.
Now we ought to be able to determine the difference between a recession and a depression without resorting to the poor humor of boring economists
The questions begs an answer:: Is the World in a Recession or a Depression????