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Several years ago, I heard someone claim that the distinction between "recession" and "depression" is less than 100 years old. Apparently all economic downturns used to be called a "recession." But when things began to head south in the 1930s, economists tried to assuage concerns by telling people that we're not really in a recession; it's just a mild depression and nothing to get alarmed over.

This, of course, backfired spectacularly as the "mild depression" turned into one of the greatest economic collapses in modern history, and nowadays the term refers, not to something that's kinda like a recession but milder, but something that's kinda like a recession but worse.

It's a very interesting story, but is it true? I tried to verify it but between articles on (medical) depression and articles on the events surrounding the Great Depression, the history of the term itself is annoyingly hard to Google!

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    Does this answer your question (text from first link)? An economic depression is a period of sustained, long-term downturn in economic activity in one or more economies. It is a more severe economic downturn than a recession, which is a slowdown in economic activity over the course of a normal business cycle. See 'Occurrence' chapter of first link: Pre 1945: economic crises for recession ; pre 1929: panics for depression. Nov 15, 2021 at 22:05
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    @MCW What do you want that's not spelled out in my final paragraph? Nov 15, 2021 at 22:33
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    I would expect at least a discussion of why Wikipedia "The term was frequently used for regional crises from the early 19th century until the 1930s, and for the more widespread crises of the 1870s and 1930s," is inadequate.
    – MCW
    Nov 16, 2021 at 7:58

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The Oxford English Dictionary has citations for the modern sense of "recession" ("A period of economic decline during which trade and industrial activity are reduced") from 1905, and from the 1840s in the more general sense of "a recession in prices".

By comparison, the modern sense of "depression" is cited as early as the 1820s ("that depression in manufactures and commerce"), with the more general "a depression in the public funds" as early as 1793. One of their citations is to an official document - by the 1880s, the UK government was appointing Royal Commissions to look into "the Depression of Trade and Industry", suggesting the term was very firmly established by then.

So it certainly seems that of the two, "depression" is the older.

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  • Interesting. Is there reason to believe that in 1905, a recession was considered something less severe than a depression, the way it is today? Nov 15, 2021 at 22:10
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    @MasonWheeler it's not clear from the citations, unfortunately! They're pretty short snippets. It wouldn't surprise me if the two were pretty mixed in general use until after the Depression of the 30s.
    – Andrew
    Nov 15, 2021 at 22:40
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    @MasonWheeler It is likely that an economic crises preceded a panic in the past, just as a recession precedes a depression today. The exact definition when one ends and the other starts will have varied over time and country. Nov 16, 2021 at 10:05

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