Is the Current Economic Downturn/Recession Going To Turn Into a Depression?

Jonathan Garner
3 min readSep 27, 2022
Photo by Towfiqu barbhuiya on Unsplash

The economy has slowed considerably this year. This is a fact…whatever label you want to put on it. The only question now is how bad it’s going to get. While one may be tempted to say that this downturn is going to be mild, I think one needs to be cautious about such a prediction.

First and foremost, nobody knows what will happen; the best we can do is look at historical data. One of the issues, however, is what one means by the term ‘depression.’ This is important because we need to be on the same page. The reality of the situation is that I see the term “depression” thrown around a lot, but I’ve never seen a single person tell us what they mean by the term (I’m not asking people to be Bertrand Russell, but we all need to be more precise and clear — me included).

So, what are some possible definitions of an (economic) depression? Well, let’s look at some proposals that I thought of.

An economic depression is when:

A. The unemployment rate is very high

B. The economy stops growing for a long time

C. There’s a severe recession coupled with an economy that is stagnant for years

D. There’s a situation where an economy doesn’t grow for decades (e.g. Japan)

As we can see, an economic depression is not merely a really bad recession. It seems to me that many times people substitute “bad recession” for “depression”, but those aren’t the same thing; they are different.

From the definitions given, it’s far from clear that a person can know when an economic depression will plausibly occur; furthermore, it’s not obvious that you or I can be aware that an economic depression will occur at all, at least under some definitions of a ‘depression.’ On the contrary, perhaps it is possible to know when an economy will suffer for a long period of time (i.e. depression). Perhaps, it will be said that if the population of a certain economy is declining, then that is a good reason to think that the economy of that same country will also decline in the long term. The decline would not be merely short-term because of the nature of the case. That’s the claim, but what are we to make of the claim? I think it’s fair as far…

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Jonathan Garner

Finance/Investing/Economics/Philosophy/Religion blogger. I’m also a Philosophy of Religion blogger:https://jonathandavidgarner.wordpress.com/