Economic Indicators and Measurements

Recession versus Depression

• So what’s the difference?
• Recession
• Is an economic downturn that usually lasts for six to eight months. i.e. Great Recession 2008-2013
• Depression
• Is an extended period in which a nation’s economy slows severely, causing hardship for households, businesses and the government. i.e. Great Depression 1929-1939

Review of Business Cycles

• The economy goes through somewhat predictable business cycles of expansion (when GDP increases), peak (the highest level of GDP), contraction (declining real GDP and employment), and trough (the lowest level of GDP and employment). Then the cycle begins again.