A recession is a natural element of the business cycle that occurs when the economy declines for two consecutive quarters. A depression, on the other hand, is a prolonged decline in economic activity that lasts years rather than months. This makes recessions far more common: in the United States, there have been 33 recessions and only one depression since 1854.
Is a recession or depression worse?
A recession is a negative trend in the business cycle marked by a reduction in production and employment. As a result of this downward trend in household income and spending, many businesses and people are deferring big investments or purchases.
A depression is a strong downswing in the business cycle (much more severe than a downward trend) marked by severely reduced industrial production, widespread unemployment, a considerable decline or suspension of construction growth, and significant cutbacks in international commerce and capital movements. Aside from the severity and impacts of each, another distinction between a recession and a depression is that recessions can be geographically confined (limited to a single country), but depressions (such as the Great Depression of the 1930s) can occur throughout numerous countries.
Now that the differences between a recession and a depression have been established, we can all return to our old habits of cracking awful jokes and blaming them on individuals who most likely never said them.
What is the difference between a recession and a depression?
- A recession and a depression are both times when the economy shrinks, but their severity, duration, and total impact are different.
- A recession is a prolonged drop in economic activity that affects all sectors of the economy.
- A depression is a more severe economic slump, and in the United States, there has only been one: the Great Depression, which lasted from 1929 to 1939.
What occurs when you’re depressed?
Depression is a serious mental condition that can have a significant impact on a person’s life. It can lead to emotions of melancholy, hopelessness, and a loss of interest in activities that linger for a long time. It can also cause physical symptoms like as pain, a change in appetite, and sleep issues.
How long do economic downturns last?
A recession is a long-term economic downturn that affects a large number of people. A depression is a longer-term, more severe slump. Since 1854, there have been 33 recessions. 1 Recessions have lasted an average of 11 months since 1945.
How can we avoid a downturn in the economy?
It is well understood how an increase in oil prices can have a knock-on effect on practically everything in the market. Consumers lose purchasing power as a result, which might lead to a drop in demand.
Loss of consumer confidence
Consumers will change their purchasing habits and eventually limit demand for goods and services if they lose faith in the economy.
Signs of an upcoming economic depression
There are several things that individuals should be aware of before an economic downturn occurs so that they can be prepared. The following are some of them:
Worsening unemployment rate
A rising unemployment rate is frequently a precursor to a coming economic downturn. Consumers will lose purchasing power as the unemployment rate rises, resulting in decreasing demand.
Rising inflation
Inflation can be a sign that demand is increasing due to rising wages and a strong workforce. Inflationary pressures, on the other hand, can deter individuals from spending, resulting in decreasing demand for goods and services.
Declining property sales
Consumer expenditure, including property sales, is often high in an ideal economic condition. When an impending economic downturn occurs, however, home sales decline, reflecting a loss of trust in the economy.
Increasing credit card debt defaults
When people use their credit cards a lot, it usually means they’re spending money, which is good for the economy. When debt defaults mount, however, it may indicate that people are losing their ability to pay, signaling an economic downturn.
Ways to prevent another economic depression
There is always the worry of another ‘Great Depression,’ which is why economists recommend the following strategies to prevent it from happening.
What happens to your brain when you’re depressed?
Even though clinical depression has a significant impact on how a person feels, it is more than just being sad. Most people experience sadness at some point in their lives. Clinically depressed people are plagued by feelings of hopelessness for lengthy periods of time. The influence each event has on the brain is one of the key distinctions between temporarily feeling down and serious depression.
Individuals dealing with life’s regular ups and downs may cry, become upset, and isolate themselves from friends and family for a period of time. They may even oversleep or stay awake all night. But, in the end, their capacity to function, complete tasks, and fulfill duties is unaffected. They recover from their melancholy and, for the most part, their brain remains undamaged.
Individuals suffering from clinical depression, on the other hand, do not recover as quickly from their emotions of hopelessness and melancholy. Symptoms can last weeks, months, or even years. They are unable to function as efficiently as they formerly did. Even modest chores and obligations can be tough to manage. This is due to the fact that clinical depression can alter the brain, the body’s command center.
The Brain Shrinks
According to studies, those who suffer from clinical depression exhibit shrinkage in some areas of the brain. Despite the fact that studies disagree about where parts of the brain are most impacted, data consistently shows a link between clinical depression and shrinkage in the following areas:
- The hippocampus is a part of the brain that is involved in learning and memory. In addition, the hippocampus aids in the regulation of emotions and stress chemicals. Neurons in the hippocampus diminish as depression affects the brain’s chemical balances, causing problems concentrating and memory loss. A shrinking hippocampus can also make it harder to complete routine tasks, leading to feelings of despondency, remorse, and worry.
- The prefrontal cortices are responsible for controlling impulses, adapting to obstacles, processing and regulating emotions, reasoning, and planning. Individuals can become impulsive and easily angered, agitated, and upset when certain parts of the brain decrease. Brain fog, difficulty thinking clearly, memory loss, and difficulty making judgments are all possible symptoms.
- The thalamus is in charge of regulating sleep, attentiveness, and awake. A thalamus that has shrunk is unable to maintain a good sleep pattern, which has a negative impact on an individual’s appetite and well-being.
The degree of shrinkage that happens is often determined by the severity and duration of a person’s depression.
Brain Inflammation
The brain can also become inflamed as a result of clinical depression. Experts aren’t clear whether inflammation causes depression or the other way around, but studies have found a link between the length of time someone has been depressed and the level of inflammation in their brain. The amygdala appears to be particularly inflamed in clinical depression.
The amygdala is an almond-shaped gland that controls whether or not people feel happy or sad. The amygdala becomes hyperactive and enlarged as a result of the high levels of cortisol generated during a depressed episode. Individuals may suffer sleep disturbances, social anxiety, restlessness, guilt, panic, and self-blame as a result of this. Inflammation of the brain can also result in the death of brain cells. Further brain shrinkage and impaired neurotransmitter function may result as a result of this. Inflammation of the brain can also make it less neuroplastic, or changeable. The formation of new brain cells comes to an end. Damaged and dying older brain cells accelerate the aging of the entire brain.
Inflammation of the brain also slows the transmission of information between neurons. The brain’s overall operation slows down. Individuals’ reasoning becomes sluggish and hazy. They are exhausted and cranky. Their energy levels drop, and they become sluggish. Cytokines, which are inflammatory immune cells, interfere with serotonin levels, impairing people’s ability to feel happy.
Reduced Oxygen Levels
Reduced oxygen levels in the body have also been related to clinical depression. Hypoxia is a medical term for this situation. Brain cells can perish if the brain does not receive enough oxygen to operate correctly. In fact, brain cells begin to die after only 5 minutes of oxygen deprivation. Individuals may initially experience:
The longer people go without enough oxygen, the more serious their symptoms can get. Hypoxia can cause severe symptoms such as:
What are the most common reasons for depression?
- Abuse. Abuse of any kind, whether physical, sexual, or emotional, can make you more susceptible to depression later in life.
- Age. Elderly people are more likely to suffer from depression. Other circumstances, such as living alone and lacking social support, can exacerbate this.
- Medications in particular. Some medications, such as isotretinoin (for acne), interferon-alpha (an antiviral medicine), and corticosteroids, can raise your risk of depression.
- Conflict. Personal problems or disagreements with family members or acquaintances might lead to depression in someone who is biologically vulnerable to it.
- It’s either death or a loss. Though natural, sadness or grief following the death or loss of a loved one might increase the risk of depression.
- Gender. Depressive women are around twice as likely as depressed males. Nobody knows why. Hormonal changes that women go through at various stages of their lives could be a factor.
- Genes. A history of depression in the family may raise the risk. Depression is regarded to be a complex trait, implying that there are likely many separate genes, each with a minor effect, rather than a single gene that contributes to disease risk. Depression’s genetics, like those of most psychiatric disorders, aren’t as uncomplicated as those of purely hereditary diseases like Huntington’s chorea or cystic fibrosis.
- Major occurrences. Even happy events like starting a new job, graduating, or marrying might trigger sadness. Moving, losing a job or money, getting divorced, or retirement can all be stressful events. Clinical depression, on the other hand, is never merely a “natural” reaction to stressful life events.
- Other issues of personal nature. Social isolation as a result of various mental diseases or being expelled from a family or social group can all contribute to the development of clinical depression.
- Illnesses that are serious. Depression can occur as a result of a serious disease or be prompted by another medical condition.
- Misuse of a substance. Nearly one-third of those who struggle with substance abuse also suffer from significant or clinical depression. Even if drugs or alcohol help you feel better for a short time, they will eventually worsen your depression.
What causes depression?
Depression is caused by a variety of factors. It can happen for a variety of causes and can be triggered by a range of factors.
An distressing or stressful life event, such as bereavement, divorce, illness, redundancy, or work or money concerns, can be the catalyst for some people.
Depression is frequently caused by a combination of factors. For example, you may be depressed after becoming ill and then experiencing a painful incident, such as a loss.
A “downward cycle” of circumstances that leads to depression is frequently discussed. If your relationship with your partner falls apart, for example, you’re likely to feel depressed, stop seeing friends and family, and start drinking more. All of this can make you feel bad and even make you depressed.
According to certain research, you’re more prone to get depression as you get older, and it’s more common in people who live in challenging social and economic situations.