So, what is the difference between a recession and an economic crisis? The economy works in something called the business cycle. During a recession, the economy slows down. In general, it is caused by bad policies and unexpected events. It lasts under a year. Economists define it as the decline of GDP (Gross domestic product). That is the value of all the produced goods and services during a given period. The origin of the word is the Latin “recessio,” meaning retreat.
On the other hand, an economic crisis is a much deeper problem. First of all, it lasts longer – i.e., a year or more. Secondly, the consequences are much more sweeping. For example, unemployment grows to dangerous rates. Changes in society are also much more extensive.
Both of these are natural processes. Lastly, a Depression is an economic crisis of a significant measure – hence, The Great Depression.