Nonprofit, nonpartisan journalism. Supported by readers.


When does a recession turn into a depression?

As I’ve mentioned before, the U.S. government has no formal standards for defining when a recession turns into a depression. The consistently smart and useful Calculated Risk blog argues that by the conventional yardstick of economists–a peak-to-trough GDP contraction of 10 percent or more–we’re only a third of the way there. Assuming a 7 percent rate of contraction for the first quarter of 2009, CR points out that the economy would have to go on declining at a 6.6 percent rate for another year to turn what we’re experiencing now into a depression.

But according to a Rasmussen poll released yesterday, 53 percent of Americans currently think we’re headed for a ’30s-style debacle. Also of interest: Just 32 percent of parents with children living at home think their kids will eventually have it better than they did.


You can also learn about all our free newsletter options.

No comments yet

Leave a Reply