The recent recession has brought an increase in unemployment as well as a sharp decrease in income, output, and world trade, in developed and underdeveloped countries (Georg, 2009). So this paper addresses the question: Is the result of the credit crunch a recession or a depression. First, the paper describing the definitions of a recession and a depression is using relevant examples. Second, this paper illustrates the differences between them by using the Great Recession beginning in 1929 with the Crash on Wall Street and into the 1930s with the double-dip. Finally, this paper reflects any similarities and/or differences between the events leading up to the Great Recession and those of the Great Depression.  
According to NBER’s (2010), the definition of recession is a significant decline in economic activity spread across the economy and last more than a few months to more than a year, normally visible in real GDP, real income, employment, industrial production, and wholesale retail sales. It begins just after the economy reaches a peak of activity and ends as the economy reaches its trough (NBER’s, 2010).
The definition of economic depression is simply a recession that lasts longer and has a larger decline in business activity (Moffatt, not dated). Georg (2009) stated that the Great Depression is an archetypal example of a depression which in terms as a severe recession, while a recession is defined as a period of cut of incomes and unemployment rate rose. According to Moffatt (not dated), the changes in GDP was a good rule of thumb for determining the difference between a recession and a depression, normally real GDP declines by more than 10 percent during a depression. Moffatt (not dated) stated that the Great Depression of the 1930s can be seen as two separate events: an incredibly severe depression lasting from August 1929 to March 1933 where real GDP declined by almost 33 percent; then another less severe depression of 1937-38 where real GDP declined by...