Recession vs. Depression: What's the Difference?
Edited by Huma Saeed || By Sawaira Riaz || Published on November 2, 2023
A Recession is a temporary economic downturn, while a Depression is a prolonged and severe economic slump.
Key Differences
A Recession is generally defined as a decline in GDP for two or more consecutive quarters. While negative growth is concerning, it's a normal part of economic cycles. A Depression, conversely, is a much more severe and extended decline in economic activity.
Sawaira Riaz
Nov 02, 2023
Recessions are often characterized by decreased consumer spending, higher unemployment rates, and a contraction in the economy. Depressions, on the other hand, witness even steeper declines in consumer spending, soaring unemployment rates, and prolonged economic hardships.
Sawaira Riaz
Nov 02, 2023
While Recessions can be a natural part of the economic cycle and may occur more frequently, Depressions are rare and can last for many years. The economic challenges faced during a Depression are more profound than those in a Recession.
Sawaira Riaz
Nov 02, 2023
Policy responses to Recessions often involve monetary and fiscal interventions to stimulate the economy. In contrast, addressing a Depression might require more aggressive and prolonged interventions due to its deep-rooted and extensive economic impact.
Aimie Carlson
Nov 02, 2023
Another point of distinction is public perception. While Recessions may cause unease, the term "Depression" often invokes memories of the Great Depression of the 1930s, marked by extreme economic decline and immense human suffering.
Janet White
Nov 02, 2023
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Comparison Chart
Duration
Typically shorter, months to a couple of years
Prolonged, often several years
Sawaira Riaz
Nov 02, 2023
Unemployment
Increase, but less severe
Significant increase, often double-digit percentages
Sawaira Riaz
Nov 02, 2023
Frequency
More common, part of economic cycles
Rare events, not part of regular economic cycles
Sawaira Riaz
Nov 02, 2023
Policy Interventions
Monetary and fiscal policies to stimulate the economy
Aggressive and sustained interventions required
Harlon Moss
Nov 02, 2023
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Recession and Depression Definitions
Recession
A temporary reduction in a country's gross domestic product.
The government introduced new policies to combat the Recession.
Sawaira Riaz
Oct 27, 2023
Depression
A long and severe downturn in an economy.
The Great Depression of the 1930s affected millions globally.
Sawaira Riaz
Oct 27, 2023
Recession
A phase in the business cycle marked by economic slowdown.
The company's profits dwindled during the Recession.
Sawaira Riaz
Oct 27, 2023
Depression
An extended period of economic decline greater than a Recession.
The country took years to recover from the Depression.
Sara Rehman
Oct 27, 2023
Recession
A general decline in economic activity across the economy.
The Recession led to increased unemployment rates.
Janet White
Oct 27, 2023
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Depression
A prolonged period of high unemployment and reduced economic activity.
Banks failed and businesses shuttered during the Depression.
Sara Rehman
Oct 27, 2023
Recession
A period of economic decline lasting for a short duration.
Many experts believe the stock market crash triggered the Recession.
Sara Rehman
Oct 27, 2023
Recession
A downturn in economic growth lasting more than a few months.
Consumer confidence was low during the Recession.
Sawaira Riaz
Oct 27, 2023
Recession
The erosion of a cliff or headland from a given point, as from the action of a waterfall.
Sawaira Riaz
Oct 13, 2023
Recession
The motion of celestial objects away from one another in an expanding universe.
Sawaira Riaz
Oct 13, 2023
Depression
A mood disorder characterized by persistent sadness or inability to experience pleasure combined with other symptoms including poor concentration, indecisiveness, sleep problems, changes in appetite, and feelings of guilt, helplessness, and hopelessness. Also called clinical depression, major depressive disorder.
Sawaira Riaz
Oct 13, 2023
Recession
A significant period of economic decline from the peak to the trough of a business cycle, characterized by decreasing aggregate output and often by rising unemployment.
Sawaira Riaz
Oct 13, 2023
Depression
A reduction in physiological vigor or activity
A depression in respiration.
Sawaira Riaz
Oct 13, 2023
Recession
The withdrawal in a line or file of participants in a ceremony, especially clerics and choir members after a church service.
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Oct 13, 2023
Depression
A lowering in amount, degree, or position
Depression of stock prices.
Sawaira Riaz
Oct 13, 2023
Recession
The restoration of property by a grantee back to the previous owner by means of a legal conveyance.
Sawaira Riaz
Oct 13, 2023
Depression
A period of drastic economic decline, characterized by decreasing aggregate output, falling prices, and rising unemployment.
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Oct 13, 2023
Recession
A period of low temperatures that causes a reduction in species; ice age.
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Oct 13, 2023
Recession
(economics) A period of reduced economic activity
Statisticians often define a recession as negative real GDP growth during two consecutive quarters.
Sawaira Riaz
Oct 13, 2023
Recession
The ceremonial filing out of clergy and/or choir at the end of a church service.
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Oct 13, 2023
Depression
The angular distance below the horizontal plane through the point of observation.
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Oct 13, 2023
Depression
(Astronomy) The angular distance of a celestial body below the horizon.
Sawaira Riaz
Oct 13, 2023
Recession
(surgery) A procedure in which an extraocular muscle is detached from the globe of the eye and reattached posteriorly.
Sawaira Riaz
Oct 13, 2023
Depression
A state of mind producing serious, long-term lowering of enjoyment of life or inability to visualize a happy future.
I used to suffer from depression, but now I'm mostly content with my life.
Sawaira Riaz
Oct 13, 2023
Recession
The act of receding or withdrawing, as from a place, a claim, or a demand.
Mercy may rejoice upon the recessions of justice.
Sawaira Riaz
Oct 13, 2023
Depression
A period of low morale or unhappiness (a period of experiencing the above-mentioned state of mind) which lasts longer than several weeks and may include ideation of self-inflicted injury or suicide.
Sawaira Riaz
Oct 13, 2023
Recession
A period during which economic activity, as measured by gross domestic product, declines for at least two quarters in a row in a specific country. If the decline is severe and long, such as greater than ten percent, it may be termed a depression.
Sawaira Riaz
Oct 13, 2023
Depression
(geography) An area that is lower in topography than its surroundings.
Sawaira Riaz
Oct 13, 2023
Recession
A procession in which people leave a ceremony, such as at a religious service.
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Oct 13, 2023
Depression
(meteorology) An area of lowered air pressure that generally brings moist weather, sometimes promoting hurricanes and tornadoes.
Sawaira Riaz
Oct 13, 2023
Recession
The act of ceding back; restoration; repeated cession; as, the recession of conquered territory to its former sovereign.
Sawaira Riaz
Oct 13, 2023
Recession
The state of the economy declines; a widespread decline in the GDP and employment and trade lasting from six months to a year
Sawaira Riaz
Oct 13, 2023
Depression
Four consecutive quarters of negative, real GDP growth. See NBER.
The Great Depression was the worst financial event in US history.
Sawaira Riaz
Oct 13, 2023
Depression
The act of lowering or pressing something down.
Depression of the lever starts the machine.
Sawaira Riaz
Oct 13, 2023
Recession
The withdrawal of the clergy and choir from the chancel to the vestry at the end of a church service
Sawaira Riaz
Oct 13, 2023
Depression
A lowering, in particular a reduction in a particular biological variable or the function of an organ, in contrast to elevation.
Sawaira Riaz
Oct 13, 2023
Depression
A falling in of the surface; a sinking below its true place; a cavity or hollow; as, roughness consists in little protuberances and depressions.
Sawaira Riaz
Oct 13, 2023
Depression
A mental state characterized by a pessimistic sense of inadequacy and a despondent lack of activity
Sawaira Riaz
Oct 13, 2023
Depression
A long-term economic state characterized by unemployment and low prices and low levels of trade and investment
Sawaira Riaz
Oct 13, 2023
Depression
A time period during the 1930s when there was a worldwide economic depression and mass unemployment
Sawaira Riaz
Oct 13, 2023
Depression
An air mass of lower pressure; often brings precipitation;
A low moved in over night bringing sleet and snow
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Oct 13, 2023
Depression
A state of depression and anhedonia so severe as to require clinical intervention
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Oct 13, 2023
Depression
A concavity in a surface produced by pressing;
He left the impression of his fingers in the soft mud
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Oct 13, 2023
Depression
Angular distance below the horizon (especially of a celestial object)
Sawaira Riaz
Oct 13, 2023
Depression
A deep and persistent recessionary phase.
The Depression saw a sharp decline in industrial production.
Sawaira Riaz
Oct 27, 2023
Depression
A major and sustained downturn in the economy.
The effects of the Depression were felt for over a decade.
Sawaira Riaz
Oct 27, 2023
FAQs
What defines a Recession?
A Recession is usually defined as two consecutive quarters of negative GDP growth.
Sawaira Riaz
Nov 02, 2023
How is a Depression different from a Recession?
A Depression is a longer and more severe downturn than a Recession.
Sawaira Riaz
Nov 02, 2023
How long does a Recession typically last?
Recessions can last from a few months to a couple of years.
Sawaira Riaz
Nov 02, 2023
How do businesses typically fare in a Depression?
Many businesses struggle or fail during a Depression due to reduced consumer demand.
Sawaira Riaz
Nov 02, 2023
What can governments do to combat a Recession?
Governments can use monetary and fiscal policies to stimulate the economy during a Recession.
Aimie Carlson
Nov 02, 2023
Are Depressions common in modern economies?
No, Depressions are rare compared to Recessions.
Sara Rehman
Nov 02, 2023
Was the economic crisis of 2008 a Recession or Depression?
The 2008 crisis is commonly referred to as the Great Recession.
Sara Rehman
Nov 02, 2023
How does unemployment vary between a Recession and Depression?
Unemployment is higher in a Depression than in a Recession.
Sawaira Riaz
Nov 02, 2023
Can a Recession turn into a Depression?
Yes, if a Recession is deep and prolonged, it can evolve into a Depression.
Sawaira Riaz
Nov 02, 2023
What's the most famous Depression in history?
The Great Depression of the 1930s is the most well-known.
Aimie Carlson
Nov 02, 2023
What are the psychological effects of a Recession on society?
A Recession can lead to increased stress, anxiety, and uncertainty in society.
Sawaira Riaz
Nov 02, 2023
Is it possible for an economy to recover quickly from a Recession?
Yes, with the right policies, economies can experience a rapid recovery from a Recession.
Janet White
Nov 02, 2023
How do global markets influence a Depression?
Global markets are interconnected, so a Depression in one can impact others.
Sara Rehman
Nov 02, 2023
Is it advisable to invest during a Recession?
It depends; some view Recessions as opportunities, while others prefer to wait.
Sara Rehman
Nov 02, 2023
Do central banks play a role in managing Recessions?
Yes, central banks often adjust interest rates and enact policies to address Recessions.
Sawaira Riaz
Nov 02, 2023
How did people cope during the Great Depression?
People used various means, from bartering to forming community support groups.
Sawaira Riaz
Nov 02, 2023
Do Recessions have any positive effects?
Recessions can lead to economic adjustments, shedding inefficient practices.
Sawaira Riaz
Nov 02, 2023
Can personal savings help during a Recession?
Yes, savings can act as a financial cushion during economic downturns like Recessions.
Sawaira Riaz
Nov 02, 2023
Are there global Depressions?
Yes, a Depression in major economies can have worldwide effects.
Aimie Carlson
Nov 02, 2023
Can a country be in Depression while others are growing?
Yes, Depressions can be isolated, but they often have global repercussions.
Sawaira Riaz
Nov 02, 2023
About Author
Written by
Sawaira RiazSawaira is a dedicated content editor at difference.wiki, where she meticulously refines articles to ensure clarity and accuracy. With a keen eye for detail, she upholds the site's commitment to delivering insightful and precise content.
Edited by
Huma SaeedHuma is a renowned researcher acclaimed for her innovative work in Difference Wiki. Her dedication has led to key breakthroughs, establishing her prominence in academia. Her contributions continually inspire and guide her field.
