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A depression is a severe and prolonged downturn in the economy. Prices fall, reducing purchasing power. There tends to be high unemployment, lower productivity, shrinking wages, and general economic pessimism.
Since the Great Depression following the stock market crash of 1929, the governments and central banks of industrialized countries have carefully monitored their economies. They adjust their economic policies to try to prevent another financial crisis of this magnitude.
- Browse Related Terms: bull market, Correlation, Countercyclical stock, Crash, Cyclical stock, Defensive security, deflation, Depression, inflation, Market cycles, Secular market
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