What is the term for an economic recession that is prolonged and significantly severe?

The term that refers to an economic recession that is prolonged and significantly severe is "depression." This is characterized by a substantial decline in economic activity across various sectors, including high unemployment rates, decreased consumer spending, and widespread business failures.

A depression typically lasts for several years and can lead to long-lasting impacts on the economy, making it more severe than a standard recession, which is a temporary downturn. During a depression, the economic contraction is much deeper and more persistent, which can fundamentally alter consumer and business confidence, sometimes leading to lasting changes in economic policy and societal structures.

This term is distinct from other economic conditions like deflation, which refers specifically to a decrease in the general price level of goods and services, and stagnation, which denotes a situation where the economy is not growing but is also not actively contracting. While a recession is a common term for a short-term economic downturn, a depression occurs when such a downturn becomes deeply entrenched and extends over a much longer period with greater severity.