A brief list of Depressions

This is an edited version of an entry posted on the Urban Dictionary under the name, Abu Yahya.

A depression is a prolonged economic crisis characterized by drastic (i.e., >20%) decline in output, reduction in employment, and deflation. Other technical conditions include a liquidity trap and "permanent" (i.e., persisting in many sectors for several quarters) failure to reach equilibrium.

Difference between a Recession and a Depression

The technical distinction between a recession and depression can vary depending on the school of economics, although economists usually agree on which event is a recession, and which is a depression. In Keynesian economics, a depression is defined by the existence of a flat liquidity-money (LM) curve (which means that interest rates have no influence on people's determination to hold their wealth as cash); and/or a nearly vertical investment-savings (IS) curve (which means interest rates have no influence on the willingness of entrepreneurs to expand/continue operations).

In contrast, a recession is a much less drastic event. Interest rates still have influence on investment and liquidity, and there is no deflation. Conventional fiscal policy and monetary policy, combined and in moderate doses, can restore full employment.

(Please see the CEPA Economics Site for Keynesian theories of the business cycle)

Neoclassical economics/New Classical economics defines a recession as a shift in people's income/leisure preferences as the result of a technology shock. The technology shock sharply reduces the returns to labor, so workers are paid less and many withdraw their labor from the market. In a depression, the technology shocks are compounded and cause a permanent change in the production function; large numbers of enterprises are no longer viable.


More generally, a recession involves the downward phase of a routine business cycle; these typically occur every three to seven years. A depression represents a partial collapse of the industrial system, usually brought about by failed financial intermediaries.

Partial List of Depressions

Here follows a short list of economic crises that were regarded as possible depressions at the time. Items and resources will be added as they become available.

1815-21	Post-Napoleonic War Depression
1829-33	1832 Panic (per Conant, p.623) 1830-'33 Depression (per Handcock, p.228) Numerous banking failures in UK
1837-44	Commercial Crises of 1836-39 (Handcock, p.240) (Conant, p.623) Crash, Wall Street (Sobel, p.32)
1854-57	Depression of 1854 (UK)
1867-69	Failure of Overend Gurney and Co (Conant, p.643)
1876-79	Crisis of 1876 (Conant, p.648)
1893-96	Crisis of 1893 (Conant, p.668)
1920-22	Post-WW1 Depression
1929-1939	Great Depression

Major Panics & Localized Crises

1825	Crisis of 1825 (UK) (Conant, p.619)
1847	Commercial Crisis of 1847 (UK & France) (Handcock, p.259) (Conant, p.631)
1857	Commercial Crisis of 1857 (UK) (Handcock, p.292) Crash, New York ("Western Blizzard") (Sobel, p.77)
1861-1863	Cotton Famine (UK) US Civil War
1907	Knickerbocker Trust Panic (USA) (Sobel, p.297) (Conant, p.698)

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Sources & Additional Reading

W. D. Handcock, English Historical Documents 1833-1874, Routledge (1996), p.228; this table cites the official Poor Law Report of 1909.

Robert Sobel, Panic on Wall Street: a Classic History of America's Financial Disasters, E. P Dutton (1988)

Charles Conant, A History of Modern Banks of Issue, G.P. Putnam & Sons (1915),