Definition Of Economic Depression Vs Recession

A recession is a widespread economic decline that lasts for several months.

Definition of economic depression vs recession. A recession is a downtrend in the economy that can affect production and employment and produce lower household income and spending. A depression is a more severe downturn that lasts for years. Since 1945 recessions have lasted for 11 months on average. This leads to the simple definition of a depression as a recession that lasts longer and has a larger decline in business activity.

There s been only one depression the great depression. It lasted a decade. The term recession was developed in this period to differentiate periods like the 1930s from smaller economic declines that occurred in 1910 and 1913. The effects of a depression are much more severe characterized by widespread unemployment and major pauses in economic activity.

A recession is a normal part of the business cycle that generally occurs when gdp contracts for at least two quarters.