Investor Glossary-depressionInvestor Glossary-depressionInvestor Glossary-depressionInvestor Glossary-depressionInsightful stock market charts - Click here
investor
Categories    # A B C D E F G H I J K L M N O P Q R S T U V W X Y Z

Depression

The HTML to link to this page
 

In economics, a severe and prolonged recession is sometimes called a depression. Unlike a recession, no standard definition of a depression exists. (A recession is often defined as two consecutive quarters of declining GDP though the NBER is the official arbiter of what constitutes a recession.) Like a recession, a depression is characterized by increased unemployment, reduced output and investment, and tightening credit. Price deflation and an increased number of bankruptcies are also manifestations of a depression. What ultimately causes and sustains a depression is subject to debate. Most economists agree that a recession is a normal part of the business cycle, yet the severe downturn (i.e. depression) is abnormal. One theory is that a recession can be exacerbated into a depression by policy errors. Policy errors can either create conditions that set up the economy for a fall in output or simply hinder recovery. The Great Depression that affected most of the world beginning in 1929 is the archetype.



Rate this depression definition...

Learn about investing with the Investor Glossary Term of the Day


Click here for insightful stock market charts. Where is the market headed? The answer may surprise you. Find out
with the exclusive & Barron's recommended charts of Chart of the Day.


Popular Terms: reverse mortgage, required rate of return, per diem, debt service coverage, phantom income, open position, labor relations, covered put, APR, deferred revenue, annual return, balance sheet, ex-dividend, FICO score, implied volatility, irrevocable trust, 144a, dividends payable, LIBOR, real GDP, current ratio, VIX, quality assurance, Zero Cost Collar, option premium, class C shares, wholly-owned subsidiary, EBITDA, command economy, deferred tax, 1031 exchange, FTSE, stock split, 1035 exchange, ex-dividend date, inflation, retained earnings, minority interest, stock market close, Key Rate Duration, average price per share, cancelled check, risk management, diluted share, margin rate, limit order, 401a, liquidity ratio, in escrow


Accounting | Banking | Bonds | Brokers | Economy | Futures | Mutual Funds | Options | Real Estate | Retirement | Stocks | Taxes | Technical Analysis
Investor Glossary | Term of the Day | Suggest a Term | Chart of the Day | Dogs of the Dow
©2004-2016 Investor Glossary - All rights reserved - Terms of Use