Before reading this article, I highly recommend you to read the writing about unemployment and GDP.

• A recession is a downward trend in the business cycle, one that is defined by a decrease in both production and employment.
• This trend impacts household income and spending, forcing many firms and households to avoid making major investments or purchases as a result.
• It is normally visible in real GDP, real income, employment, industrial production, and wholesale-retail sales.
  

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• Depression is the slowdown in economic activity that is substantial and prolonged.
• It affects all of the countries, sometimes even nations.
• In 1929, the world had seen the non-greatest, The Great Depression.
  

 The Fiscal Year

For a better understanding of the differences between depression and recession, it is essential to know what Fiscal Year(FY) means.

FY is a 12-month period used by companies and governments for financial reporting and budgeting. It sometimes follows the January – December calendar year and sometimes doesn’t.

The first quarter (Q1) starts on January 1 and ends on March 31. The second quarter (Q2) goes from April 1 to June 30. The third quarter (Q3) is from July 1 to September 30, and the fourth quarter (Q4) is from October 1 to December 31.

Recession, as expressed by GDP in correlation with monthly measures such as an increase in unemployment, is usually recognized as two consecutive quarters(Q’s) of economic decline.

On the other hand, depression is an extremely concerning, long-term case compared to the recession. The Great Depression lasted for 43 months. 

Economic depression outcomes reflecting on people are similar to clinical depression outcomes.

1. Loss of interest or pleasure in most or all normal activities
2. Tiredness and lack of energy, so even small tasks take extra effort
3. Frequent or recurrent thoughts of death, suicidal thoughts, suicide attempts even suicide itself.

Clinical depression has more effects than above and should be taken seriously. People of any age, including children, may be affected by clinical depression. However, with psychiatric therapy, antidepressant medications, or a combination of the two, clinical depression symptoms, even if intense, usually improve. (Just a side note, be aware).

Here is a video about The Great Depression. Pay close attention to people’s despair.

There is no black-and-white situation. It’s all part of life. Highs, lows, middles. -Van Morrison

I hope that the lowest in an economy is caused by the recession, not depression. Thank you for reading my content.

SOURCES

Recession vs. Depression: What is the difference? (n.d.). Retrieved February 17, 2021, from https://www.merriam-webster.com/words-at-play/economic-recession-vs-depression-difference

https://www.mayoclinic.org/

Fernando, J. (2020, December 17). What quarters (q1, q2, q3, and q4) tell us. Retrieved February 17, 2021, from https://www.investopedia.com/terms/q/quarter.asp#:~:text=The%20standard%20calendar%20quarters%20that,August%2C%20and%20September%20(Q3)

Amadeo, K. (2020, November 21). What causes an economic depression, and why one won’t happen again. Retrieved February 17, 2021, from https://www.thebalance.com/what-is-an-economic-depression-3306013#:~:text=An%20economic%20depression%20is%20an,was%20the%20world’s%20only%20depression.