Are We in a Recession or a Depression?
There seems to be a lot of confusion as to whether we are in a recession or a depression, so I decided to do some investigating. Here is what I found out.
According to Merriam-Webster's Dictionary, the official definition of a recession is "a period of reduced economic activity." Furthermore, some economists have an even more strict definition for a recession requiring a contracting economy of either 2 or 4 consecutive quarters (either 6 or 12 months). Using any of these definitions, the United States of America as well as the rest of the world is in a recession as of December 2008. Even the National Bureau of Economic Research has officially declared that we are in a recession too.
On the other hand, according to Merriam-Webster's Dictionary, the official definition of a depression is "a period of low general economic activity marked especially by rising levels of unemployment." Unfortunately, I was not able find a more technical definition for a depression anywhere. Therefore with the mass unemployment throughout the world and with the economy shrinking, I can only conclude that we are in a depression too.
As a result, the world is in both a recession and a depression. Apparently, these two economic descriptions are not mutually exclusive as I was led to believe.
by Phil for Humanity