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KAI RYSSDAL: You know, it wasn't all that long ago that we were arguing over whether the economy was in a recession. That debate ended at the beginning of December.
But this morning, the head of the International Monetary Fund gave some people a start. He said the world's advanced economies are already in a depression.
We asked Marketplace's Dan Grech to find out, a) If that's true; and b) If it is, what does it mean?
DAN GRECH: If you ask economists whether we're in a depression, most will answer like Mark Zandi at Moody's Economy.com.
MARK ZANDI: No. At least not yet.
But once in a while you'll come across an economist who says this:
PETER MORICI: Yes, we're in a depression. We're not in a normal business cycle. The economy will not easily recover from the slump that it's in.
That's Peter Morici, a business professor at the University of Maryland. He first said we're in a depression back in December.
PETER MORICI: We're in a prolonged and sustained contraction in economic activity. The economy is shifting down and not coming back. That cannot be fixed, even with a lot more government spending.
Most other economists, like Mark Zandi, say it's just too soon to call this downturn a depression.
ZANDI: Well, a depression has to be extraordinarily severe, so at least double-digit unemployment. It has to be very broad-based, across all industries, occupations, regions of the country. We're getting close to that. But also very long.
At least five years, he says.
Economists have no established definition of a depression. The Bureau of Economic Research, the group that officially declares recessions, doesn't even use the term. Beyond the plain figures, however, there's another factor at play.
Again, Mark Zandi.
ZANDI: Sentiment is a key part of a downturn. I think you go from a bad economy to a recession because people lose confidence. And you probably go from a recession to a depression because people lose complete faith.
Zandi says he hopes recent government initiatives like the bank bailout and the economic stimulus package will help restore some faith.
I'm Dan Grech for Marketplace.