What's the difference between a recession and a depression?

[rudeguy]

Is there a set definition of either of these? What about a slow down? I keep hearing slow down and recession in the news...how much worse does it have to get before we are in a depression?

 

[her209]

Recession is classically defined as two consecutive quarters of negative real GDP growth.

 

[Jumpem]

We have not even entered a recession yet. A recession is defined as two consecutive quarters of negative GDP growth. We have yet to have a single one.

 

[IronWing]

What's the difference between a recession and a depression?

Marketing.

 

[rudeguy]

So the stock market could drop to 5,000 and as long as the GDP didn't slip, we wouldn't be in a recession or depression?

 

[Jumpem]

Originally posted by: rudeguy
So the stock market could drop to 5,000 and as long as the GDP didn't slip, we wouldn't be in a recession or depression?

Correct.

 

[rudeguy]

Originally posted by: Jumpem

Originally posted by: rudeguy
So the stock market could drop to 5,000 and as long as the GDP didn't slip, we wouldn't be in a recession or depression?

Correct.

I think I understand. The stock market crash back in the 30's triggered the depression, it wasn't technically part of it?

 

[Random Variable]

"Depression" is not a technical term. It basically just means a really bad prolonged recession.

 

[Lurknomore]

recession- necessitates a gov't bailout.
depression- needs an impending world war bailout.

 

[imported_weadjust]

recession- necessitates beer lots of beer
depression- needs prozac

 

[mugs]

Depressions have inspirational boxing matches and horse races.

 

[Lurknomore]

Originally posted by: mugs
Depressions have inspirational boxing matches and horse races.

:laugh::thumbsup:

 

[RKS]

recession: eating a lot of soup
depression: making soup out of free ketchup packs and water

 

[Imdmn04]

Recession: when your neighbor is out of a job.
Depression: when you are out of a job.

 

[IronWing]

Recession: What your hairline does when you age.
Depression: What your does when you age.

 

[Lurknomore]

Also,

recession- long stare out of 400ft high window
depression- 4 second stare at 400ft high window

 

[TehMac]

Originally posted by: rudeguy

Originally posted by: Jumpem

Originally posted by: rudeguy
So the stock market could drop to 5,000 and as long as the GDP didn't slip, we wouldn't be in a recession or depression?

Correct.

I think I understand. The stock market crash back in the 30's triggered the depression, it wasn't technically part of it?

You're quite right. In fact, there are quite a few Economic historians out there who would contend that the crash of 1929 had almost nothing to do with the depression of the 1930's. They would argue that in fact, the sweeping panics after the crash, along with a failure of the Federal Reserve (i.e. The Federal Government), really led to the crash.

 

[flxnimprtmscl]

Originally posted by: Lurknomore

Originally posted by: mugs
Depressions have inspirational boxing matches and horse races.

:laugh::thumbsup:

Don't forget golf tournaments.

 

[rudeguy]

Originally posted by: TehMac

Originally posted by: rudeguy

Originally posted by: Jumpem

Originally posted by: rudeguy
So the stock market could drop to 5,000 and as long as the GDP didn't slip, we wouldn't be in a recession or depression?

Correct.

I think I understand. The stock market crash back in the 30's triggered the depression, it wasn't technically part of it?

You're quite right. In fact, there are quite a few Economic historians out there who would contend that the crash of 1929 had almost nothing to do with the depression of the 1930's. They would argue that in fact, the sweeping panics after the crash, along with a failure of the Federal Reserve (i.e. The Federal Government), really led to the crash.

That makes sense. Kind of like the media's coverage of all things bad is negatively affecting the stock market now?

One last question. Would a depression trigger deflation (whatever the opposite of inflation is)? Or are those unrelated as well?

 

[IronWing]

Originally posted by: rudeguy

Originally posted by: TehMac

Originally posted by: rudeguy

Originally posted by: Jumpem

Originally posted by: rudeguy
So the stock market could drop to 5,000 and as long as the GDP didn't slip, we wouldn't be in a recession or depression?

Correct.

I think I understand. The stock market crash back in the 30's triggered the depression, it wasn't technically part of it?

You're quite right. In fact, there are quite a few Economic historians out there who would contend that the crash of 1929 had almost nothing to do with the depression of the 1930's. They would argue that in fact, the sweeping panics after the crash, along with a failure of the Federal Reserve (i.e. The Federal Government), really led to the crash.

That makes sense. Kind of like the media's coverage of all things bad is negatively affecting the stock market now?

One last question. Would a depression trigger deflation (whatever the opposite of inflation is)? Or are those unrelated as well?

It can go either way. There have been depressions with deflation like the US in the '30s and depressions with hyperinflation like Latin America in the '80s.