Depression vs recession distinction: recessions are fixed by rate cuts; depressions cannot be. The key diagnostic: is rate cutting still effective? If not (ZLB or inflationary constraint), you’re in a depression, requiring MP2/MP3 tools.
Depression vs recession distinction: recessions are fixed by rate cuts; depressions cannot be. The key diagnostic: is rate cutting still effective? If not (ZLB or inflationary constraint), you’re in a depression, requiring MP2/MP3 tools.