Depression (economics) 38289 219459493 2008-06-15T09:46:37Z 118.90.85.22 you cannot have both price deflation and hyperinflation (not without a citation, anyway) In [[economics]], a '''depression''' is a term commonly used for a sustained downturn in the economy. It is more severe than a [[recession]] (which is seen as a normal downturn in the [[business cycle]]). Considered a rare but extreme form of recession, the start of a depression is characterized by unusual increases in [[unemployment]], restriction of [[credit]], shrinking output and investment, price [[deflation (economics)|deflation]] or [[hyperinflation]], numerous [[bankruptcies]], reduced amounts of [[trade]] and commerce, as well as violent currency [[devaluation]]s. Unlike a recession, there is no official definition for a depression, even though some have been proposed. Generally it is marked by a substantial and sustained shortfall of the ability to purchase goods relative to the amount that could be produced given current resources and technology ([[potential output]]). One could say that while a recession refers to the economy "falling down," a depression is a matter of "not being able to get up." The most noted depression is the [[Great Depression]] that affected much of the world in the 1930s. Also notable is the U.S. [[Long Depression]] that lasted from the 1870s until the 1890s. The situation of [[Japan]] in the 1990s after the [[bubble economy]] popped has also been termed a depression, as was Hong Kong's severe deflation and contraction in the early 2000s. Today many economists believe that the combination of the [[social safety net]] and a much better understanding of macroeconomics makes another [[Great Depression]] highly unlikely.{{Fact|date=June 2008}} Others believe that with growing US [[deficits]], increasing bankruptcies, the attainment of [[peak oil]], plus other factors, the US is in the early stages of the next [[great depression]].{{Fact|date=June 2008}} == See also == *[[Recession]] *[[List of recessions|List of recessions and depressions]] *[[business cycle]] *[[deflation (economics)|deflation]] [[Category:Macroeconomics]] [[de:Strukturkrise]] [[fi:Lama (talous)]] [[uk:Депресія (економіка)]]