Depression, the phase of the capitalist cycle immediately following a crisis (see Cycle, Capitalist). In this period production ceases, on the whole, to drop and is stagnant, or remains at the level it attained towards the end of the crisis. Enterprises operate well below capacity. Unemployment is as high as during the crisis. Trade is sluggish but stocks of commodities have stopped growing and start to melt away; some of them are destroyed and some are sold at below-price. The rate of interest is low because the rate of profit has fallen, while the supply of loan capital greatly exceeds demand. In trying to adapt to low prices, capitalists cut back production costs, reduce wages, and increase the productivity and intensity of labour. Gradually, the fixed production assets are renewed, this being a decisive factor in overcoming the depression and initiating a recovery. The growing demand for equipment results in an increase in its production, and also in that of the materials, fuel, etc. that are needed for this purpose. Consequently, employment rises, and this, too, also contributes to raising production. In this way, a transition is made to the recovery phase. The aggravation of capitalist contradictions in the context of the general crisis of capitalism hinders this transition as do mass unemployment, inflation and the monetary crisis at the modern stage.