Answer to Question #25882 in Economics of Enterprise for dereca
One question sometimes asked is how a recession compares with a depression, especially the Great Depression of the 1930s. There is no formal definition of depression, but most analysts consider a depression to be an extremely severe recession, in which the decline in GDP exceeds 10 percent. There have been only a handful of depression episodes in advanced economies since 1960. The most recent was in the early 1990s in Finland, which registered a decline in GDP of about 14 percent. That depression coincided with the breakup of the Soviet Union, a large trading partner of Finland. During the Great Depression, the U.S. economy contracted by about 30 percent over a four-year period. Although the latest recession is obviously severe, its output cost was much smaller than that of the Great Depression.
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