I am an Ultra-Conservative, Alpha-Male, True Authentic Leader, Type "C" Personality, who is very active in my community; whether it is donating time, clothes or money for Project Concern or going to Common Council meetings and voicing my opinions. As a blogger, I intend to provide a different viewpoint "The way I see it!" on various world, national and local issues with a few helpful tips & tidbits sprinkled in.
An astute reader and guest blogger (Guest Blog - Picky Cudahy Citizen) brought up a good point. Recession and depression in terms of economics is not the same. It doesn’t matter just because other people improperly interchange them that you should. And just because others are doing that doesn’t make it right nor should people continue to use them incorrectly. It does matter in the end!
I will pull out the Economics 101 college book for this one.
Book is Macro Economics for Today Second Edition by Irvin Tucker
Some people confuse things so I will try to clear it up.
Recessions and depressions are covered under the Four Phases of the Business Cycle of Peak, Recession, Trough, and Recovery
What is the difference between a recession and depression?
According to the old saying: “A recession is when your neighbor loses his/her job, and a depression is when you lose your job!” This one-liner is close to the true distinction between these two concepts.
A macro setback called a recession or contraction follows each peak. A recession is a downturn in the business cycle during which real GDP declines. During a recession, the economy is functioning inside its production curve. A general rule-of-thumb is that a recession is at least two consecutive quarters (six months) in which there is a decline in real GDP. The time between the peak and the trough is the duration of the recession. Since WW2, most recessions last 11 months.
A deep and long recession is a depression.
Not all recessions are long and deep, thus the distinction for having the word depression.
Answer: A depression is a severe economic downturn that lasts several years. Fortunately, the
Looking at it this way. All depressions would be an extended recession, but not all recessions are depressions. Like all squares are rectangles, but not all rectangles are squares. Bears maybe brown, but not all brown things are bears!
All cuts to your skin are not life-threatening. Only those called life-threatening cuts are.
Does happy and content mean the same thing? Not really, they are similar, but have varying degrees of differences.
When we generalize and interchange words without examining the means, we destroy our language.
Would there be another “Great Depression” NO! That is a proper name term for historical reference (think in terms of World Wars). Could have “Great Depression II” or Depression of 20xx and so on.
People are calling this recession we are in the “Great Recession.” Any future recessions/depressions would most likely follow the naming convention the government uses for the recessions of the past (the start of the year) – Recession of 1990 or the recession of 1981.
Have we had a depression before the “Great Depression”? YES!
History information. Do notice the years of the recession (duration of GDP time) dictates if it is a recession or depression.
The next recession confirmed occurred in the years between 1807 and 1814, and was called the Depression of 1807.
Economic recessions in