What term describes a prolonged economic contraction?

The term that describes a prolonged economic contraction is depression. A depression is characterized by a significant decline in economic activity, typically lasting for an extended period and marked by widespread unemployment, falling prices, and a reduction in consumer and business spending. It goes beyond the shorter-term fluctuations of a recession, which is a temporary downturn in economic activity that can be followed by recovery.

In economic terms, a recession is defined as two consecutive quarters of negative economic growth, while a depression is a more severe and prolonged downturn that may last for several years and has a more profound impact on the economy and society. This distinction is critical in understanding the different levels of economic decline and the potential measures that can be taken to address them.