Are there any commonly accepted, empirical data points as to what constitutes an economic depression? If so, what are they? I'm familiar with many of the metrics that are used to discuss what a recession is defined by, but not so with the case of a depression.
I read the other day - and this is probably far from scientific - that a depression is defined as a >10% peak to trough decline in GDP. Great Depression was -30%.
Your best bet is to wait until stock_trad3r turns bearish and then you know we're just coming OUT of a depression
A depression I take to mean: deep recession. Imagine 50% of the US population unemployed. That's a depression. You're waiting in line at soup kitchens because you have nothing. This, my friends, is a depression. Since we're nowhere close to that, I'd say we're far from the soup kitchens and Hoovervilles that marked the Great Depression.
I don't think there are defined metrics, you just "know it when you see it". I like the way Roger Nightingale puts it.... "A recession is a controlled slowdown which can be quickly reversed". "A depression is like a recession except significantly worse economically, AND the decline is NOT under control... so it cannot be reversed at will." If the economy reverses by early 2010, I think they will label this time as a recession. If the decline continues for a couple of more years, they'll call it a depression.
US maximum unemployment rate during the Great Depression: 24.9% GDP deltas during the same: 1930 -8.6% 1931 -6.4% 1932 -13% 1933 -1.3%
"50% of the US population is unemployed" that is an impossible statistics. in the great depression at the peak the unemployment rate was 25%. children retirees and housewives are included in the population statistics but are not inc. in the unemployment rate.
when you eat your cat raw, because you cant afford to cook, and you cant even afford any salt to put on it, that's a depression