What is the difference between a recession and a depression?

A recession is a significant decline in economic activity lasting for several months, typically characterized by a drop in GDP, rising unemployment, and reduced consumer spending. A recession is often seen as part of the natural economic cycle and can be temporary if addressed with appropriate economic policies. A depression, on the other hand, is a more severe and prolonged downturn, often lasting years, and is marked by a steep fall in output, widespread unemployment, and prolonged financial instability. While recessions are more common and manageable, depressions can lead to long-term economic challenges and recovery can take much longer.