What is the difference between depression and recession?

There are key differences between depression and recession. For example, in the US, the last real depression was a great depression of 30 years. However, the US economy has experienced frequent seizures of recession. It is noted with a reduction in the country's gross domestic product (GDP) in more than a quarter of a year. GDP reduction is measured as less than 10% decrease.

Also, the economic recession tends to be measured in neighborhoods annual, rather than in years. Depression is measured in a given year as a reduction in GDP by 10% or higher. Therefore, it is not possible to describe exactly a quarterly reduction by more than 10% as depression, unless there are the same conditions for one year.

If economic conditions will improve in the fourth quarter of the year and the GDP reduction will become an increase, then it is considered a recession. However, LiHDP has been constantly decreasing and the sums of the year show 10% or greater GDP decrease, then a year is considered depressed.

recession tend to be VyskYet with more frequency than depression, because the country's economy is relatively fragile and mild changes or shocks like dot.com cause reduced expenditures that reduce GDP by less than 10%. Usually a diversified economy is recovering from this type of shock at a relative speed, because there are other ways to spend money.

Recession dot.com lasted several years. Some people inaccurately called it depression. He did not make GDP more than 10%, so the economy was embedded and was not depressed.

people tend to reach for a term that reflects more than its real meaning. Referring to the depressive economy, it evokes the type of depression when it has to spend less, spend less or invest less. In comparison, the recession seems to be more neutral or more positive.

Sometimes people will deliberately use terms to make negative or positive rotation to declining economic conditions. A politician who supports a particular economic policy could refer to depression as rECESI to reduce responsibility for bad policy. A politician on the other side of economic policy could call a recession of depression to exaggerate the peace that policy affects people.

In fact, depression and recession can be measured by relatively specific terms, and economists often visibly correct those who use words incorrectly.