Recession is temporary; depression is prolonged and severe

A recession is a temporary economic decline lasting at least six months, marked by reduced industrial production, consumer spending, and employment. It is part of the economic cycle, starting after a peak and ending at a trough. A depression occurs when a recession becomes severe and prolonged, lasting several years. It results in significant declines in GDP, employment, and other economic indicators, often leading to bankruptcies and debt defaults. Governments respond to recessions and depressions with monetary and fiscal policies. These include cutting interest rates, increasing government spending, lowering taxes, and providing bailouts to struggling industries.