An intriguing dilemma arises with the language of the downturn. In surveys, voters consistently say that they believe we’re in a recession. Yet, economists aren’t aborad. The definition of a recession is negative GDP and we haven’t been there yet, though we could be headed there. So, how can we reconcile the public’s feelings of a slump with the long held definitions that scholars have used. In this ‘lost decade’ situation, maybe we should use depression. It doesn’t entail negative GDP growth, but captures the economic pain plaguing Main Street.
I think Paul Krugman found the right words: Lesser Depression.