In economics, a depression is a term commonly used for a sustained downturn in the economy. It is more severe than a recession (which is seen as a normal downturn in the business cycle). Considered a rare but extreme form of recession, the start of a depression is characterized by unusual increases in unemployment, restriction of credit, shrinking output and investment, price deflation and/or hyperinflation, numerous bankruptcies, reduced amounts of trade and commerce, as well as violent currency devaluations. Unlike a recession, there is no official definition for a depression, even though some have been proposed. Generally it is marked by a substantial and sustained shortfall of the ability to purchase goods relative to the amount that could be produced given current resources and technology (potential output). One could say that while a recession refers to the economy "falling down," a depression is a matter of "not being able to get up." Face-to-face trading interactions on the New York Stock Exchange trading floor. ... In macroeconomics, a recession is a decline in a countrys real gross domestic product (GDP), or negative real economic growth, for two or more successive quarters of a year. ... The business cycle or economic cycle refers to the fluctuations of economic activity about its long term growth trend. ... CIA figures for world unemployment rates, 2006 Unemployment is the state in which a person is without work, available to work, and is currently seeking work. ... Look up credit in Wiktionary, the free dictionary. ... “Deflation” redirects here. ... In economics, hyperinflation is inflation that is out of control, a condition in which prices increase rapidly as a currency loses its value. ... Bankruptcy is a legally declared inability or impairment of ability of an individual or organization to pay their creditors. ... This article is about economic exchange. ... Devaluation is a reduction in the value of a currency with respect to other monetary units. ... In economics, potential output (also referred to as natural real gross domestic product) refers to the highest level of real Gross Domestic Product output that can be sustained over the long term. ...

The most noted depression is the Great Depression that affected much of the world in the 1930s. Also notable is the U.S. Long Depression that lasted from the 1870s until the 1890s. The situation of Japan in the 1990s after the bubble economy popped has also been termed a depression. For other uses, see The Great Depression (disambiguation). ... The Long Depression (1873 – 1896) affected much of the world from the early 1870s until the mid-1890s and was contemporary with the Second Industrial Revolution. ... For the band, see 1990s (band). ... An economic bubble occurs when speculation in a commodity causes the price to increase, thus producing more speculation. ...

Today many economists believe that the combination of the social safety net and a much better understanding of macroeconomics makes another Great Depression highly unlikely. Others believe that with growing US deficits, increasing bankruptcies, the attainment of peak oil, plus other factors, the US is in the early stages of the next great depression. The social safety net is a term used to describe a collection of services provided by the state (such as welfare, universal healthcare, homeless shelters, and perhaps various subsidized services such as transit), which prevent any individual from falling into poverty beyond a certain level. ... For other uses, see The Great Depression (disambiguation). ... A budget deficit occurs when an entity (often a government) spends more money than it takes in. ... For other uses, see Peak oil (disambiguation). ... For other uses, see The Great Depression (disambiguation). ...

It should be noted that governments may resort to heavy-handed methods to deal with the civil unrest caused by the economic difficulties presented by a depression.

See also

• Recession
• List of recessions and depressions
• business cycle
• deflation
• The Coming Economic Depression: http://www.markswatson.com/Depression1.html