London, Feb 5: British Prime Minister Gordon Brown appeared to acknowledge for the first time that the world economy was heading for a 1930s-style 'depression'.
Brown stumbled slightly over his words at Commons question time, just a week after admitting that Britain was facing a 'deep' recession. During question time Brown told "We should agree, as a world, on a monetary and fiscal stimulus that will take the world out of depression."
Like United States, Britain is also in recession due to two consecutive quarters of falling GDP. However, there is no clear definition of a 'depression'.
The Economist magazine suggested in Dec, 2008 that there are two principal criteria for distinguishing the two terms: a decline in 'real' GDP that exceeds 10 percent; or one that lasts more than three years. Real GDP accounts for inflation.
United States has qualified on both counts resulting in the 'Great Depression'. US GDP fall 13 per cent during 1937 and 1938 and GDP plummets by around 30 per cent between 1929 and 1933.
Some analysts have already used the term 'depression' to describe the economic situation in the United States. Albert Edwards of Societe Generale wrote in January that it is looking likely in America, while labor economist Peter Morici, of the University of Maryland, said the United States is 'already in the jaws of a depression.'
OneIndia News (With inputs from Agencies)