*noun*; prolonged economic crisis characterized by drastic (i.e., >20%) decline in output, reduction in employment, and deflation. Other technical conditions include a liquidity trap and "permanent" (i.e., persisting in many sectors for several quarters) failure to reach equilibrium.
Usually the word "depression" (when referring to economics) is used to refer to the Great Depression, although in fact there were eight incidents of a global depression between 1815 and 1922. These were
--- 1815-21
--- 1832-33
--- 1837-44
--- 1854-57
--- 1867-68
--- 1876-79
--- 1893-96
--- 1920-22
In addition, there have been many localized depressions, panics (e.g., the 1907 Panic {USA}, followed by the Mexican Depression of 1908), and recessions.
DIFFERENCE BETWEEN RECESSION & DEPRESSION
The technical distinction between a recession and depression can vary, although economists usually agree on which is which. In Keynesian economics, a depression is defined by the existence of a flat liquidity-money (LM) curve (which means that interest rates have no influence on people's determination to hold their wealth as cash); and/or a nearly vertical investment-savings (IS) curve (which means interest rates have no influence on the willingness of entrepreneurs to expand/continue operations).
In contrast, a recession is a much less drastic event. Interest rates still have influence on investment and liquidity, and there is no deflation. Conventional fiscal policy and monetary policy, combined and in moderate doses, can restore full employment.
Neoclassical economics/New Classical economics defines a recession as a shift in people's income/leisure preferences as the result of a technology shock. The technology shock sharply reduces the returns to labor, so workers are paid less and many withdraw their labor from the market. In a depression, the technology shocks are compounded and cause a permanent change in the production function; large numbers of enterprise are no longer viable.
More generally, a recession involves the downward phase of a routine business cycle; these typically occur every three-seven years. A depression represents a partial collapse of the industrial system, and a comprehensive collapse of the financial system.
Usually the word "depression" (when referring to economics) is used to refer to the Great Depression, although in fact there were eight incidents of a global depression between 1815 and 1922. These were
--- 1815-21
--- 1832-33
--- 1837-44
--- 1854-57
--- 1867-68
--- 1876-79
--- 1893-96
--- 1920-22
In addition, there have been many localized depressions, panics (e.g., the 1907 Panic {USA}, followed by the Mexican Depression of 1908), and recessions.
DIFFERENCE BETWEEN RECESSION & DEPRESSION
The technical distinction between a recession and depression can vary, although economists usually agree on which is which. In Keynesian economics, a depression is defined by the existence of a flat liquidity-money (LM) curve (which means that interest rates have no influence on people's determination to hold their wealth as cash); and/or a nearly vertical investment-savings (IS) curve (which means interest rates have no influence on the willingness of entrepreneurs to expand/continue operations).
In contrast, a recession is a much less drastic event. Interest rates still have influence on investment and liquidity, and there is no deflation. Conventional fiscal policy and monetary policy, combined and in moderate doses, can restore full employment.
Neoclassical economics/New Classical economics defines a recession as a shift in people's income/leisure preferences as the result of a technology shock. The technology shock sharply reduces the returns to labor, so workers are paid less and many withdraw their labor from the market. In a depression, the technology shocks are compounded and cause a permanent change in the production function; large numbers of enterprise are no longer viable.
More generally, a recession involves the downward phase of a routine business cycle; these typically occur every three-seven years. A depression represents a partial collapse of the industrial system, and a comprehensive collapse of the financial system.
From 1929 to 1933 the U.S. price level fell 25 percent. Many economists blame this deflation for the severity of the Great Depression. They argue that the deflation may have turned what in 1931 was a typical economic downturn into an unprecedented *sic* period of high unemployment and depressed income.
N. Gregory Mankiw, William M. Scarth, *Macroeconomics: Canadian Edition*, 2nd ed. (2003) p.318
N. Gregory Mankiw, William M. Scarth, *Macroeconomics: Canadian Edition*, 2nd ed. (2003) p.318
by Abu Yahya March 7, 2009
Get the depression mug.The Bush Administration slashed taxes for the wealthy while spending massive amounts of money on the bush war in Iraq, which created huge budget deficits. This along with deregulation of business caused a collapse of the financial sector and the worst economy since the Great Depression. Since Obama will be the one that has to clean up this mess Bushies call it the Obama Depression.
by Michael_Hunt July 25, 2009
Get the Obama Depression mug.Related Words
Everyone around you is breathing so easily, and you sit alone gasping for air. No one bothers to check if you need help because why would you? why would anyone need help with all this air? And you keep on choking and gasping watching everyone breathing easily.
person1:Do you think there is something wrong with her? like depression maybe?
person 2:Why would there be? Life is so good!
person 2:Why would there be? Life is so good!
by malkele August 22, 2014
Get the Depression mug.A very serious mental illness/disorder. That is hard to get through but many people can do it. You just have to keep going. You can be having the best time of your life, and it will still be there. The guilt, the anxiety, the hate, the disgust. It is horrible and absolute hell to go through. I suffer from depression and I have for years. I have been diagnosed aswell. But they're is still people who dont believe or who use the word depression like it's just sadness. It's not a feeling!
by Non binary rat ●W● October 29, 2019
Get the Depression mug.Relationship Depression :
When you go to a relationship and break up after a while and still the memories of the person who you were once in relationship stays in your mind and heart and you really get depressed missing him real bad
When you go to a relationship and break up after a while and still the memories of the person who you were once in relationship stays in your mind and heart and you really get depressed missing him real bad
Megan : I cant believe it that Darren and I are over :\
Feba : Its ookay Megan , now dont feel like those relationship depression people
Feba : Its ookay Megan , now dont feel like those relationship depression people
by The Dead Gone September 19, 2009
Get the Relationship depression mug.Someone Who Begs And Is Desperate For Attention. That They Resort To Faking Depression To Their Friends, And On Social Media
My Friend Web Just Posted That He Has Depression
Probably Faking It Like The Jobber He Is
OH yeah! I Forgot! That He Is Always Faking Depression! Haha!
Probably Faking It Like The Jobber He Is
OH yeah! I Forgot! That He Is Always Faking Depression! Haha!
by Hollywood Hooligah July 22, 2018
Get the Faking Depression mug.Sunday night depressing is feeling of stress and anxiety before the beginning of the week. Most commonly is created by fear of upcoming week and responsibilities of Monday starting duties. For example: being woken unnaturally by alarm clock, stress from work that is not likeable, feeling of duties by outside driven world. (stress, anxiety, fear, panic, hate, expectation, stereotypy, etc…). All elements are very individual and can create magnitude of negative emotions.
by SundayNight October 28, 2013
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