Thu 5 Mar, 2009 01:40 pm
The talking heads keep refering to what is happening in the economy as a "recession". I beg to differ. IMO, I think that we have a full blown depression on our hands.
Apparently, "depression" is a dirty word, with images of people selling apples on the street. Between the downwards sliding of the stock market, the tanking of real estate, the number of companies that are going "belly up" and the loss of so many jobs, what else would you call this fix that we are in now?
Nobody will call it a depression until after it's over. Shhhhh.
Apparently, "depression" is a dirty word, with images of people selling apples on the street.
I see lots of people calling this financial crisis a depression. But it's less of a dirty word than a poorly defined one, there is no widely accepted criteria for what constitutes a depression.
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.
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.