Depression A bad, depressingly prolonged RECESSION in economic activity. The textbook definition of a recession is two consecutive quarters of declining OUTPUT. A slump is where output falls by at least 10%; a depression is an even deeper and more prolonged slump. The most famous example is the Great Depression of the 1930s. After growing strongly during the roaring 20s, the American economy (among others) went into prolonged recession. Output fell by 30%. UNEMPLOYMENT soared and stayed high: in 1939 the jobless rate was still 17% of the workforce. Roughly half of the 25,000 BANKS in the United States failed. An attempt to stimulate growth, the New Deal, was the most far-reaching example of active FISCAL POLICY then seen and greatly extended the role of the state in the American economy. However, the depression only ended with the onset of preparations to enter the second world war.
Posted on: Sun, 26 Jan 2014 14:30:00 +0000
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