On inflation: defined by an increase in the money supply On deflation: defined by a decrease in the money supply Today: massive increase in the money supply... like nothing the charts have ever seen.
Consequence currently: deflation. Why the opposite? Because the definition of increased money supply being inflationary assumes the money gets to the public. The massive increase in the money supply (please see "adjusted monetary base" http://research.stlouisfed.org/publications/mt/page3.pdf ) is being held by institutions which needed it to shore up reserves. They can't lend it out on a long term basis because it is short term money. If, and only "if", all that money gets to the public, then (and only then) will inflation occur.
On recession: defined by 2 back-to-back quarters (or more) of negative GDP. The 2000-2001 'felt' like a recession, but wasn't by definition (not consecutive -- negative qtrs were Q300, Q101, & Q301)... so... though it felt like recession, it wasn't.
On depression: defined as "A depression is a severe economic downturn that lasts several years". The example is (once again) on GDP: 1933 -8.6%, 1931 -6.4%, 1932 -13.0%, and 1933 -1.3%. These are annuals (not quarterly) & my guess is that if every other quarter was positive GPD within the year but that the combination of negative & positive yielded an annual negative... then that year would count as a negative year in whole and they would wait to see if a second year was negative too. The bottom line is that we must live through two straight years of annual negative GDP before the politicians can acknowledge the depth of the pain.
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