Economic Effects Of Great Depression – The Great Depression is one of the most important economic events in world history. It affects every aspect of life. The results seem to have changed the face of global business. This article discusses in detail the economic, political, social and cultural aspects of this crisis and the process of recovery.
The ‘Great Depression’ was a time in history when the economy weakened and many people lost their jobs. The Great Depression began on October 29, 1929, when the stock market in the United States crashed. It became a global economic recession due to the special and close relationship established between the United States and European countries after the First World War. It is the longest and most difficult western business in the world. It ended with the outbreak of World War II, which began in 1939.
Economic Effects Of Great Depression
The crisis became a global economic crisis in the 1930s that affected almost all countries. The global economy collapsed rapidly. There is a reduction in income, income and personal income. This applies to countries that export raw materials as well as industrialized countries. This has caused the world economy to go backwards as all countries try to protect their economy and products by increasing taxes on imports. The world economy collapsed with trade in 1939 still below the levels of 1929. It turns the wheel to the end of the world gold standard and thus results in permanent change.
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Governments around the world have reduced their spending, which has reduced consumer demand. Construction has stopped in many countries. As a result of the measures taken by the government, real world trade such as the United States and the United Kingdom fell by 30.5%, the price of major goods fell by 30.8%, and the price of consumer goods fell by 24.4%.
Wages were reduced to 20 percent, while 25 percent of workers lost their jobs. This eased the standard of living and pushed the economy into a deep depression.
Thousands of investors lost huge amounts of money and many of them were fired, losing everything. Banks, shops and factories were closed, and millions of people lost their jobs, money and homes. In 1929, 659 public banks were closed, and by the end of 1931 the number had increased to 2,294. Many people may rely on the government or charities to provide them with food.
Due to lack of support and loans, farmers cannot support large-scale production that makes the product sustainable. The textile industry is facing a big problem. The season of work has already been one of the worst droughts in modern American history that occurred in the Great Plains in 1934. Although many events in agriculture-eg. Cotton – benefited from the crisis, agriculture suffered the biggest decline.
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The violence had a political impact. In countries such as Germany and Japan, the Depression led to an increase in the power of government forces, who accepted foreign aggression as during World War II. In Germany, economic weakness led to the rise of Adolf Hitler. Germany suffered a lot because of the huge debts that the country suffered as a result of the first world war. The Japanese invaded China and created mines and trade in Manchuria. Japan thought this economic development would solve the depression.
In countries like the United States and Great Britain, the government intervened, which eventually led to the creation of a health care system. Franklin D. Roosevelt became president of the United States in 1933. He promised a “New Deal” in which the government would intervene to reduce unemployment by providing jobs such as painting offices and maintaining roads. Both agriculture and industry supported the policy of limiting production and raising prices.
This financial crisis is affecting people in the worst way. They are surrounded by poverty from all sides.
The Great Depression ended when countries increased their armaments at the start of World War II. This growth has created jobs and put a lot of money back into circulation. In an effort to boost the national economy, governments around the world are participating in special programs in the financial markets. The United States enacted the Social Security Act (1935) in response to the Depression of the 1930s. It includes unemployment insurance, old age and family insurance. Along with this, many other things like the Securities Exchange Act of 1933, the Glass-Steagall Act, the Emergency and Reconstruction Act, etc., were introduced for reform.
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In Germany, Hitler launched a massive work program that eliminated massive unemployment in 1936. Arms, financed by the government, began to be carried on the highway. To control inflation, its use is limited by distribution and economic regulations. By 1939, Germany’s gross domestic product was 51 percent higher than in 1929, which was the result of machinery and munitions.
If we consider the Great Depression of 2008 and the Great Depression of the 1930s, where gold had a strong rise, it is clear that the gold standard is a different problem compared to the free fiat US currency of the 2008 crisis. the two conflicts are the same, but the results are different. In the 1930s, the collapse was set in decline, while in 2008 it led to inflation (high money). Unlike the 1930s, after 2008 the US economy entered a “recession”.
The Great Depression led to high inequality that has been used as a benchmark for years, but the years 2007 and 2008 saw the world reach a new level of inequality that was less than the one fought in 1929. In the process and results, both. conflicts are different.
To this day, that period has been brought back as “the sound of the twenties”, which reflects the weight and gravity of the time. In the end, the Great Depression was bittersweet. This always has negative consequences, but it also brings some positive changes.
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Christina D. Romer, Class of 1957 – Garff B. Wilson Professor of Economics, University of California, Berkeley. Former Chairman of the Council of Economic Advisers. Author of many articles on the business cycle, Federal …
Richard H. Pells, Professor of History, University of Texas, Austin. Author of Radical Visions and the American Dream: Culture and Ideology in the Depression Years.
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The Great Depression that began in the United States in 1929 and spread throughout the world, is the worst recession and economic crisis in modern history. It was marked by a decline in industrial production and prices (deflation), high unemployment, financial crisis, and increased poverty and homelessness.
Four factors play different important roles. (1) The Great Depression of 1929 destroyed confidence in the U.S. economy, leading to a decline in spending and investment. (2) The banking crisis of the early 1930s caused many banks to fail, reducing the amount of loans. (3) The gold standard required foreign banks to increase interest rates to prevent trade imbalances with the United States, restricting consumption and investment in those countries. (4) The Smoot-Hawley Tariff Act (1930) established tariffs on various products.
