A recession is when your neighbor loses his job.
A depression is when you lose your job.
The difference between the two terms is not very well understood as there many versions however here are a few examples to help make things clearer:-
Recession
The standard media definition of a recession is a decline in the Gross Domestic Product (GDP) for two or more consecutive quarters.This is not the best definition as it does not take into consideration changes in other variables like unemployment rate or consumer confidence, also only using quarterly data this definition makes it difficult to pinpoint when a recession begins or ends.
The Business Cycle Dating Committee at the National Bureau of Economic Research (NBER) provides a better way to find out if there is a recession is taking place. This committee determines the amount of business activity in the economy by looking at things like employment, industrial production, real income and wholesale-retail sales. They define a recession as the time when business activity has reached its peak and starts to fall until the time when business activity bottoms out. When the business activity starts to rise again it is called an expansionary period. By this definition, the average recession lasts about a year.
Depression
The term recession was developed in this period to differentiate periods like the 1930s from smaller economic declines that occurred in 1910 and 1913. Before the Great Depression of the 1930s any downturn in economic activity was referred to as a depression. Which means a depression is a recession that lasts longer and has a larger decline in business activity.
So now we know what is going on, what are we going to do?
If you are anything like me you are going about your day to day life and being bombarded by the horror terror stories by the media about the Recession, what different people are saying about the Recession, how big the Recession is, how long it is going to last.The purpose of this blog is for people who are sick of the negative doom and gloom media hype and anybody who can spot a positive story, opportunity and share that with other like minded people who are interested in looking on the bright side and are ready to take charge, have a bit of a laugh and stay on the sunny side of the strip.
Send us your photos of places packed with happy people, businesses booming, new emerging markets that are coming out of the current times.
