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How is it a depression if it's only been a few months? Also the IMF article predicts a 3% contraction for 2020 and a 5.8% growth in 2021, so by what definition

How is it a depression if it's only been a few months? Also the IMF article predicts a 3% contraction for 2020 and a 5.8% growth in 2021, so by what definition is this a depression?

TheHypnotist 6y ago
Basically a single month so far.
jcranmer 6y ago
A recession is where your neighbor loses their job. A depression is where you lose your job too.
chadlavi 6y ago
An unemployment rate of around 13% (as of two weeks ago[1], so probably even higher now) doesn't seem like it's going to just magically resolve itself, and it's going to have drastic effects. 1. https://www.nytimes.com/2020/04/03/upshot/coronavirus-jobless-rate-great-depression.html https://www.nytimes.com/2020/04/03/upshot/coronavirus-jobles...
- throwawaylolx 6y ago
  That's just an estimate. From your link: >Be warned, these numbers yield an imprecise estimate of today’s unemployment rate, and the truth could easily be quite a lot higher or lower. This is not an estimate of the official unemployment rate for March, which reports the state of the economy a few weeks ago when the labor market was in better shape, nor is it a forecast for the official rate in April. I don't find it useful to implicitly embed a financial forecasting model in the use of the term "depression".
logicchains 6y ago
>Also the IMF article predicts a 3% contraction for 2020 and a 5.8% growth in 2021, so by what definition is this a depression? I wonder how they get those numbers. At least half the US economy is in shutdown right now. Two months of that is equivalent to one month of the whole economy being shutdown; to 1/12th of annual GDP lost, or around 8.3%. Add another month and its 12.5% of output lost.
- throwawaylolx 6y ago
  >I wonder how they get those numbers. They explain in their article: https://www.imf.org/en/Publications/WEO/Issues/2020/04/14/weo-april-2020 https://www.imf.org/en/Publications/WEO/Issues/2020/04/14/we...
  - logicchains 6y ago
    They don't describe the actual algorithm used for the calculation there, but they do state they're assuming 8% of work days lost for countries experiencing a pandemic, 5% for other countries. So I suppose if they assumed 5% work days lost for US, and otherwise 2% GDP growth for the year, then they could get a number around -3%. Only 5% of total workdays lost sounds quite optimistic to me though.

How is it a depression if it's only been a few months? Also the IMF article predicts a 3% contraction for 2020 and a 5.8% growth in 2021, so by what definition is this a depression?

TheHypnotist 6y ago

Basically a single month so far.

jcranmer 6y ago

A recession is where your neighbor loses their job. A depression is where you lose your job too.

chadlavi 6y ago

An unemployment rate of around 13% (as of two weeks ago[1], so probably even higher now) doesn't seem like it's going to just magically resolve itself, and it's going to have drastic effects. 1. https://www.nytimes.com/2020/04/03/upshot/coronavirus-jobless-rate-great-depression.html https://www.nytimes.com/2020/04/03/upshot/coronavirus-jobles...

throwawaylolx 6y ago
That's just an estimate. From your link: >Be warned, these numbers yield an imprecise estimate of today’s unemployment rate, and the truth could easily be quite a lot higher or lower. This is not an estimate of the official unemployment rate for March, which reports the state of the economy a few weeks ago when the labor market was in better shape, nor is it a forecast for the official rate in April. I don't find it useful to implicitly embed a financial forecasting model in the use of the term "depression".

logicchains 6y ago

>Also the IMF article predicts a 3% contraction for 2020 and a 5.8% growth in 2021, so by what definition is this a depression? I wonder how they get those numbers. At least half the US economy is in shutdown right now. Two months of that is equivalent to one month of the whole economy being shutdown; to 1/12th of annual GDP lost, or around 8.3%. Add another month and its 12.5% of output lost.

throwawaylolx 6y ago
>I wonder how they get those numbers. They explain in their article: https://www.imf.org/en/Publications/WEO/Issues/2020/04/14/weo-april-2020 https://www.imf.org/en/Publications/WEO/Issues/2020/04/14/we...
- logicchains 6y ago
  They don't describe the actual algorithm used for the calculation there, but they do state they're assuming 8% of work days lost for countries experiencing a pandemic, 5% for other countries. So I suppose if they assumed 5% work days lost for US, and otherwise 2% GDP growth for the year, then they could get a number around -3%. Only 5% of total workdays lost sounds quite optimistic to me though.