What is Answerbag?

Ask questions and share your knowledge with the world here on Answerbag. Get the best answers where there are no duplicate questions and questions are always open - our community of over 1,142,000 will find your answer!

Join For Free!
 

What Is the Definition of an Economic Depression?

Thursday, March 26, 2009
Related Tags: gdp | percent | 1990s | recession | 1930s
 

Instructions

Significance

  • Step 1:
    Characteristics of an economic depression include severe declines in economic output, as measured by the gross domestic product (GDP) and a sharp increase in unemployment. During the Great Depression, U.S. unemployment peaked at 25 percent.

Identification

  • Step 1:
    The generally accepted definition of a recession is two consecutive quarters of falling gross domestic product (GDP). The general measure for a depression is a decline in GDP of more than 10 percent or a recession that lasts more than three years.

History

  • Step 1:
    The Great Depression of the 1930s meets both criteria. From 1929 to 1933, GDP declined by more than 30 percent. A shorter, less severe depression occurred in 1937 to 1938, when GDP fell by more than 13 percent.

Geography

  • Step 1:
    The Asian financial crisis of the 1990s sparked depressions in several southern Asian nations. Finland's GDP fell 11 percent in the early 1990s, while Russia's GDP plummeted by more than 40 percent during the 1990s.

Fun Fact

  • Step 1:
    Before the 1930s, all economic downturns were referred to as depressions. The term "recession" was coined to distinguish severe downturns such as the Great Depression from milder declines in economic output.

Resources


Related Content
Depression Vs Recession
This article examines the differences between an economic recession and a depression. While conceding that there is no precise rule for determining when the economy is in a recession or a...
About Recessions and the Economy
Instructions The Flexible Definintion of a Recession Step 1: What a recession is depends largely on what expert you choose to listen to, which is why sometimes media pundits argue over whether a...
Economy Depression Definition
An old joke holds that the economy is in a recession when other people lose their jobs, but in a depression when you lose yours. A depression is a severe form of economic recession, though no...
The Difference Between a Recession and a Depression
There is not one agreed-upon definition of a recession. However, recessions can lead to depressions, and the effects are felt as unemployment lines get longer and businesses shut down.
Depression Vs. Recession
Depression and recession are terms used to describe slowdowns in economic activity. Included in these activities are employment, investing, spending, profits and household incomes. Bankruptcy and...