Apparently around 2010…
The definition of “depression” (as those of “banking crisis,” “exchange rate crisis,” “recession,” and a few other concepts) generally differs across sources. This Economist piece (“Diagnosing depression: What is the difference between a recession and a depression?” December 30, 2008) covers the topic of the definition of depressions very nicely:
“A search on the internet suggests two principal criteria for distinguishing a depression from a recession: a decline in real GDP that exceeds 10%, or one that lasts more than three years. America’s Great Depression qualifies on both counts, with GDP falling by around 30% between 1929 and 1933. Output also fell by 13% during 1937 and 1938. The Great Depression was America’s deepest economic slump (excluding those related to wars), but at 43 months it was not the longest: that dubious honour goes to the one in 1873-79, which lasted 65 months.”
The Economist and I must be using the same sources… our friend Wikipedia…
An informal definition would be something along the lines of a “a substantial and sustained contraction of GDP or potential output” (this is tricky) but I would rather stick to the more formal approach. I would agree to refer to a depression when we observe:
- a decline in real GDP of more than 10%, or
- a recession lasting 2 or more years.
Between 2008 and 2013 Greek real GDP fell by approximately 27%. By the Economist count, this is the 3rd deepest recession after the U.S. Great Depression (close to 30%) and the Russian 1989-1998 Depression (a whopping drop of more than 40% in real GDP). Saudi Arabia 1981-1985 would come in a close 4th with a 25% real GDP contraction.
Background file: 7-Contessi-PDU-GreekDepression.zip
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