Depression

Definition

An economic depression is a severe and prolonged downturn in economic activity, characterized by significant decline in GDP, high unemployment, falling prices (deflation), and reduced levels of trade and investment. It represents a more extreme condition than a recession, affecting an economy for years.

Related terms

Recession: A period of temporary economic decline during which trade and industrial activity are reduced, generally identified by a fall in GDP in two successive quarters.

Gross Domestic Product (GDP): The total value of all goods and services produced over a specific time period within a country’s borders, used as a broad measure of economic health.

Unemployment: The situation when individuals who are capable of working and are actively seeking work remain jobless