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Economic Depression

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Depression Definition Glossary of Finance Terms - Depression

Depression : A depression is a long downturn of a country's economy, usually marked by a long economic recession, decline in economic growth, increase in job cuts, significant increases in unemployment, and a significant downturn in stock markets. Where a recession is seen as a normal fluctuation in the business cycle, a depression is longer and encompasses restrictions in credit and lending which influence investment and spending. Other common effects of a depression include deflation or hyperinflation.
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Unlike recessions that can be categorized by government and non-government agencies, there are no standard measurements to define a depression. One common explanation of a depression is when a significant number of individuals must sell assets in order to afford the basic necessities of living. Such circumstances arose in the US and Germany in the 1920s and 1930s, a period called the Great Depression. The Long Depression, another extended period of economic turmoil, occurred between 1873 and 1896.

Also called : Depressionary Economy, Depressed Economy.

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