Student Number: 500456082
United States vs. Structural weakness in the international economy
Many economists around the world might argue with the different views and ideas about the causes of Great depression with valid arguments and data. It seems unclear of the primary cause and the root of the Great Depression but with factual evidence gathered we can conclude that the primary cause for the Great Depression is through the structural weakness in the international economy. In this essay, we will look at the European economic structure: the changes in the production market, labor market, operation of international monetary system, and the pattern of international settlements. (Eichengreen, B.)
It was not just in the U.S, the question of consumer durables revolution can be traced to England as the consumption of costly goods were being purchased and the debts that was being accumulated increased after the war ended. Adoptions of household goods amongst families were an increasing trend, which later became a societal norm. Use of fridge, radios, cars, heaters were highly priced, therefore the people were being forced to get a loan to purchases these items. Poor regulations towards method of purchasing these durables had a direct correlation in the fluctuation in the economy. Losing all previous payments if a installment fee was to be missed presented a great weakness in trust factor of the economy as consumers felt the danger to lose their investments if the job market had even the slightest decrease. This slowed down the money circulation in the economy, and the pressure on the credit system was rising due the increased loan use by consumers to attain durables. Thus, this created a fear and increased sense of vulnerability in the economy in many industrialized nations, affecting the structural weakness of the international economy.
High unemployment in industrialized countries after the war created...