What is the difference between a recession and a depression?

A recession is a widespread economic decline that typically lasts between two and 18 months. A depression is a more severe downturn that lasts for years. The most famous depression in U.S. history was the Great Depression. It lasted a decade.

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 economic depression?

Definitions vary, but a depression typically refers to a severe and long-lasting economic decline that can affect several countries simultaneously. During an economic depression, unemployment rates rise into the double-digits and stay there for years, leading to a complete collapse in demand for consumer goods.