Are we in a recession or depression?

The old joke is that if your neighbor lost his job, it is a recession. But if you lost your job, then it is a depression.

So how do economists define a depression? There does not appear to be any firm definition, but the Wall Street Journal takes a stab at it in this ARTICLE[$]. One definition requires a decline of at least 10% in per person output. Others say that unemployment must exceed 10% and stay there for several years. And based on a WSJ poll of economists, the odds that we will see a depression is at 15% on average. The estimate range was 1% to 30%.

To reach 1930s depression levels, unemployment would have to rise to 25% and GDP would have to fall 28%. We have quite a ways to go to reach that level. The WSJ chart at the left compares today's conditions to that of the 1930s. Click on the image to enlarge it.

So do you think we are headed to a depression?