Morgan BellRecessions and Depressions
November 7th 2008 06:20
A depression is any economic downturn where real GDP declines by more than 10 percent.
A recession is an economic downturn that is less severe. As a rule of thumb recessions are often declared after two consecutive quarters of negative growth (or contraction) of gross domestic product (GDP).
The last depression in the United States was from May 1937 to June 1938, where real GDP declined by 18.2 percent.
The Great Depression of the 1930s can be seen as two separate events: an incredibly severe depression lasting from August 1929 to March 1933 where real GDP declined by almost 33 percent, a period of recovery, then another less severe depression of 1937-38.
The United States hasn’t had anything even close to a depression in the post-war period.
The worst recession in the last 60 years was from November 1973 to March 1975, where real GDP fell by 4.9 percent.
In the USA real GDP decreased at an annual rate of 0.3 percent in the third quarter of 2008, (that is, from the second quarter to the third quarter), according to advance estimates. In the second quarter, real GDP increased 2.8 percent.
The third-quarter "preliminary" estimates, based on more comprehensive data, will be released on November 25, 2008.
In Australia real GDP is estimated to have had a 2.0% growth rate this quarter.
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A recession is an economic downturn that is less severe. As a rule of thumb recessions are often declared after two consecutive quarters of negative growth (or contraction) of gross domestic product (GDP).
The last depression in the United States was from May 1937 to June 1938, where real GDP declined by 18.2 percent.
The Great Depression of the 1930s can be seen as two separate events: an incredibly severe depression lasting from August 1929 to March 1933 where real GDP declined by almost 33 percent, a period of recovery, then another less severe depression of 1937-38.
The United States hasn’t had anything even close to a depression in the post-war period.
The worst recession in the last 60 years was from November 1973 to March 1975, where real GDP fell by 4.9 percent.
In the USA real GDP decreased at an annual rate of 0.3 percent in the third quarter of 2008, (that is, from the second quarter to the third quarter), according to advance estimates. In the second quarter, real GDP increased 2.8 percent.
The third-quarter "preliminary" estimates, based on more comprehensive data, will be released on November 25, 2008.
In Australia real GDP is estimated to have had a 2.0% growth rate this quarter.
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Comment by Louie
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Comment by Morgan Bell
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yes it will be interesting to see how the real rate compares to the estimate!
i hear many news commentators declaring it a recession (and sometimes even a depression) when its really not (yet) and i think thats irresponsible journalism
the USA is most likely heading towards recession but there seems to be alot of "doomsday" people declaring something that hasnt happened yet
thanks for the comment
Comment by Wilson Pon
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Honestly, I think the financial tsunami and economic crisis will become even worse in 2009.
Comment by Morgan Bell
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yes all the predictions seem to be gloomy but theres alot to be said for not counting your chickens before theyre hatched!
thanks for stopping in
Comment by Robert Caldwell
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Comment by Morgan Bell
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thanks for the comment, what you say makes alot of sense!
stating that we (Australia) are in a "depression" is completely ridiculous, and i highly doubt the quarter we are currently in will be found to be the start of a recession
however, regarding the USA, it would fair to state that the current quarter is "estimated" as the start of a recession
i just think the news casters should be careful to identify what is fact and what is opinion or prediction - ive seen news crews knocking on the doors old old ladies and asking them how this depression compares to The Great Depression . . . like you say, ridiculous!