What is the difference between a recession and a depression?

A recession is typically defined as a decline in economic activity that lasts for at least six months, while a depression is a more severe and prolonged downturn that lasts for several years. For example, the Great Recession of 2008-2009 was a severe recession that lasted for 18 months, but it was not considered a depression.

Are recessions a normal part of the economic cycle?

Recessions are a normal part of the economic cycle. In fact, there have been 13 recessions since World War II. What Is a Depression? While people often worry about economic depressions, they are much rarer than recessions.

What does a recession look like?

Instead, NBER defines a recession as “a significant decline in economic activity spread across the economy, lasting more than a few months, normally visible in real GDP, real income, employment, industrial production, and wholesale-retail sales.”

What is the difference between a recession and a slump?

A recession is a period when the economy experiences negative growth. This can be devastating for businesses that rely on consumer spending. An economic depression is much more severe, and generally defined as two consecutive years with negative GDP. A slump is a period where the economy slows down. This can happen for a variety of reasons.