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Recession
At what point does an economic slow down become a recession?
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An economic slowdown means that the rate of growth of an economy (i.e. how much the economy is worth: creation of wealth) starts to drop. For instance, if for the last few months the economy was growing at a rate of 3.5% and next month it grew at only 1.5%, you would say the economy had slowed down quite significantly.
A recession means that the economy actually shrinks, i.e the volume of money in the system decreases. This would be manifested in the closure of businesses etc, i.e. institutions that cause spending.
I'm no economist but I think this is about right.
An economic slow down becomes a depression when enough of "we the people" begin to believe the "economic experts" that a recession is on the way. We put off buying products for no real reason and thus the economy begins to shrink, this fuels the economics experts to reassert their prophesies that a recession is coming and, ergo, we have a recession! It is a self fulfilling prophesy. There is absolutley no reason why the world economy should be heading towards any kind of a recession at this time.
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