Explore the economic impact of a recession vs. depression Explore the economic impact of a recession versus a depression However, the terms "recession", "depression" and other similar words are not interchangeable. A recession, in general, is defined as a time of decreased economic activity. However, depressions are more serious and prolonged declines. What is a Recession? A recession is defined as a period in which the economy is in decline. This is usually measured by the decline of the gross domestic product for at least two quarters. In a recession businesses can reduce their production and layoff workers. Consumer spending may also decrease. It can result in rising unemployment and declining wages as well as a reduction of the credit available. What Is a Depression A recession is not as severe as a depression. A depression is characterized by an abrupt decline in the GDP, high unemployment for a prolonged period, and decreased consumer spending. Depre...