Is it a Depression yet?

zarazara

or still a recession

SGE1

Still a recession.

zarazara

its snowing

pararct

There is no discernible boundary between a recession and depression.

I suppose if Honda and others are still on short time working and the unemployment rate is still going up this time next year then it will be a depression.

zarazara

oh, so there is no official defenition then? like what there is with a recession?

SGE1

A depression is 4 successive quarters of negative growth. We've only just entered a recession. We're not there yet.

zarazara

thanks SGE1 !

mower5

Possible definitions from the Economist
Quote "A search on the internet suggests two principal criteria for distinguishing a depression from a recession: a decline in real GDP that exceeds 10%, or one that lasts more than three years."

http://www.economist.com/finance/displaystory.cfm?story_id=12852043




Third possible definition based on cause of crisis
"recent analysis by Saul Eslake, chief economist at ANZ bank, concludes that the difference between a recession and a depression is more than simply one of size or duration. The cause of the downturn also matters. A standard recession usually follows a period of tight monetary policy, but a depression is the result of a bursting asset and credit bubble, a contraction in credit, and a decline in the general price level. In the Great Depression average prices in America fell by one-quarter, and nominal GDP ended up shrinking by almost half. America’s worst recessions before the second world war were all associated with financial panics and falling prices: in both 1893-94 and 1907-08 real GDP declined by almost 10%; in 1919-21, it fell by 13%. "

Conflict

SGE1 wrote: »

A depression is 4 successive quarters of negative growth. We've only just entered a recession. We're not there yet.

No its not! There is no official definition. There are various defintions people say is a depression but none of them are at all consitant.

Take for instance on your defintion the UK would of been in a Depression in the 1990's! Which is clearly laughable.

Really a combination of factors - Massive Unemployment (> 20%), massive descrease in Growth (>5% GDP) over a period of years would be close to something fitting a real definition. But all the word Depression really is a word for Recession - it was the word used until 1930 then after that a new word was used to mean lesser downturns.

Its probably for the best if Depression means the 1930's recession and another word is used to mean what we are going to face, or Depression 2.0 as the media are seeming to so love

luvpump

If the Economy is still contracting in say this time next year, then that is the begining of a Depression, I think a Recession last around 18 months from start to finish, longer than that maybee classed as a depression ..

SGE1

Conflict wrote: »

No its not! There is no official definition. There are various defintions people say is a depression but none of them are at all consitant.

Take for instance on your defintion the UK would of been in a Depression in the 1990's! Which is clearly laughable.

Really a combination of factors - Massive Unemployment (> 20%), massive descrease in Growth (>5% GDP) over a period of years would be close to something fitting a real definition. But all the word Depression really is a word for Recession - it was the word used until 1930 then after that a new word was used to mean lesser downturns.

Its probably for the best if Depression means the 1930's recession and another word is used to mean what we are going to face, or Depression 2.0 as the media are seeming to so love

Fair enough - the definition I gave is the one I've heard most often.

Anyway, what's in a name?