Depressed

Posted in Finance, Accounting and Economics Terms, Total Reads: 343
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Definition: Depressed

In economic terms the prolonged and sustained down turn of economic activities are termed as depression. Long duration of recession, abnormally large unemployment, lack in availability of credit, low output and consumption patterns, reduced trade, and highly volatile currency fluctuation are all features of such times. Price deflation, financial crisis, bank failures are all a part of such events.


In United States the national Bureau of Economic Research identifies depression in an economy on 2 criteria’s:

• Decline in real Gross Domestic product of the economy in more than 10 % of its original value

• Continuing recession in an economy for more than 2years


Examples of Depression doesn’t get bigger than the Great American Depression during 1930. Not only US but many western economies of the world came under the depression which was initiated during the financial crash of Wall Street in 1929.

 

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