What's the difference between a recession and a depression?

A recession and a depression are both terms used to describe a period of economic decline, but they differ in several ways.

A recession is generally defined as a period of temporary economic decline, usually lasting several months or even a few years. It is typically characterized by a decline in Gross Domestic Product (GDP), which is the total value of goods and services produced in a country, and an increase in unemployment rates. However, a recession does not necessarily result in a significant decline in economic activity or a major increase in poverty.

A depression, on the other hand, is a more severe and prolonged form of economic decline. It is typically characterized by a significant decline in GDP, widespread unemployment, a severe shortage of goods and services, and a sharp increase in poverty. Depressions are rare but can last several years or even a decade or more.

In short, the main difference between a recession and a depression is the severity and duration of the economic decline. While a recession is a temporary slowdown in economic activity, a depression is a much more severe and prolonged economic decline.