Re: "When does it qualify as a Depression ??"
You tell me!
(I understand that it's a relative term....)
I would describe a "depression" something like: 'worse then the average recession', but I'm sure there are many definitions:
In economics, a depression is a sustained, long downturn in one or more economies. It is more severe than a recession, which is seen as a normal downturn in the business cycle.
Considered a rare and extreme form of recession, a depression is characterized by abnormal increases in unemployment, restriction of credit, shrinking output and investment, numerous bankruptcies, reduced amounts of trade and commerce, as well as highly volatile relative currency value fluctuations, mostly devaluations. Price deflation or hyperinflation are also common elements of a depression.
* The Great Depression was a severe economic depression in the 1930s
* The Long Depression was an economic depression lasting between 1873–1896, known at the time as the Great Depression.
Definition
There is no widely-agreed-upon definition for a depression, though some have been proposed. In the United States the National Bureau of Economic Research determines contractions and expansions in the business cycle, but does not declare depressions.[1]
A proposed definition for depression is a sustained recessionary period in which the population is forced to dispose of tangible assets to fund every day living, as was seen in the US and in Germany in the 1930s.
Often, in Canada and the United States, the word "depression" is used interchangeably with "recession", often to simply indicate a deeper or more serious recession. Some economists require a drop in GDP of 10 percent or more before a recession would be referred to as a depression[2].
en.wikipedia.org
Arguably, *many* of the above conditions are satisfied now so, whether one describes the period we are suffering through now to be a 'mild Depression' or a 'severe Recession' doesn't really matter all that much to me. |
