Depression

In simple terms, depression can be defined as a severe and prolonged economic downturn. Some define a depression as a scenario in which real GDP declines by at least 10%. Another way to distinguish a depression from a recession is the duration. Recessions are typically referred to as lasting for one year, while depressions can last for several years. The term “depression” originated from the Great Depression of the 1930s. Later on, the term “recession” began to be used for smaller economic downturns, while “depression” was used to describe more significant slowdowns.