Great question. Unfortunately, there isn't a standard answer, although there is a well-known joke economists like to tell regarding the difference between the two. But, let's come back to that later. Recession. Let's start by defining a recession. As I mentioned, there are several commonly used definitions of a recession. read more
The difference between the two terms is not very well understood for one simple reason: There is not a universally agreed upon definition. If you ask 100 different economists to define the terms recession and depression, you would get at least 100 different answers. read more
Between trough and peak, the economy is in an expansion. Expansion is the normal state of the economy; most recessions are brief and they have been rare in recent decades. Depression. While there is also no standard definition for depression, it is commonly defined as a more severe version of a recession. read more
Definition of a recession. A recession is characterised as a period of negative economic growth for two consecutive quarters. In a recession, unemployment will rise, output fall and government borrowing increase. See more on recessions. Definition of depression. A depression is a recession but much more severe and long lasting. read more