Slowdown Vs Recession Vs Depression – Free PDF Download

ECONOMIC CYCLE

 RECESSION

• Recession refers to a phase of the downturn in the economic cycle when there is a fall in the country’s GDP for some quarters.
• It begins after the economy reaches a peak of activity and ends as the economy reaches its trough.
• A common rule of thumb for recessions is two quarters of negative GDP growth.

•  ‘A recession is a period of decline in total output, income, employment and trade, usually lasting six months to a year.’

DEPRESSION

• Depression is a prolonged period of economic recession marked by a significant decline in income and employment.
• When recession, turns out to be more severe and continues for a long term.
• A common rule of thumb for depression is a negative GDP of 10% of more, for more than 3 years.

INTERESTING FACT

• Before the Great Depression, all economic downturns were called depressions.
• After the Great Depression, the phrase ‘recession’ was used to describe downturns.
• It was done so that people wouldn’t remember the terrible time that they had during the Great Depression.

 SLOWDOWN

• A slowdown, on the other hand, simply means that the pace of the GDP growth has decreased.
• During slowdown, the GDP growth is still positive but the rate of growth has decreased.

India Is At Which Stage In 2019

• At 5%, India’s economy registered its slowest gross domestic product (GDP) growth rate since 2014.
• The current GDP figures are no indication of any impending recession.
• However, the rate of growth has slowed down.
• Hence India is facing slowdown.

ANY DEPRESSION SINCE 1930?

• There hasn’t been a decline large enough to call it a ‘depression’ since the Great Depression.
• However, the recession that began in 2007 has been called ‘The Great Recession’
• It was because of high unemployment for a long time, and the recession lasted for 18 months.

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