Similarities and Differences of the Great Depression as Compared to Today's Financial Crisis
SIMILARITIES AND DIFFERENCES OF THE GREAT DEPRESSION AS COMPARED TO TODAY'S FINANCIAL CRISIS
ABSTRACT The financial crisis which the United States is combating today, in many aspects resembles the characteristics and consequences which were the outcome of the Great Depression lasting from the time period 1929 till 1933 (Great Depression). The Great Depression of earlier times and the financial crisis of the current times from 2003-2008 will be studied in depth in the following research work in order to bring out the similarities and differences the United States faced during these two times of financial turmoil. Particular highlighted areas would comprise of government bond rates, Gross Domestic Product rates, Interest rates, money supply, and the major stock price trends in both these time periods along with a special analysis of the reactions of Congress will be looked at to try an estimate their impact.
INTRODUCTION The major impact which the financial turmoil has brought is visible in areas such as Government Bond rates, Gross domestic product of the times, Interest rates, Money supply and Major Stock Prices. The gross domestic product is one of the most crucial indicators to measure the country’s economy and progress rate. GDP represents the total dollar value of all goods and services produced over specific time duration. The Great Depression time period had left a mark which is clearly visible even after 80 years since its conception, the current financial crisis situation is almost similar, though not the same intensity and as grave as it was before but still the savers can do nothing but watch their money disappear as the banking system weakens and financial institutions fail.
GDP is represented as a comparison to the previous quarter or year. A significant change in GDP has a considerable impact on the stock market, and a bad or regressing economy means lower stock prices as in the current times and the Great Depression of 1929.
ABSTRACT The financial crisis which the United States is combating today, in many aspects resembles the characteristics and consequences which were the outcome of the Great Depression lasting from the time period 1929 till 1933 (Great Depression). The Great Depression of earlier times and the financial crisis of the current times from 2003-2008 will be studied in depth in the following research work in order to bring out the similarities and differences the United States faced during these two times of financial turmoil. Particular highlighted areas would comprise of government bond rates, Gross Domestic Product rates, Interest rates, money supply, and the major stock price trends in both these time periods along with a special analysis of the reactions of Congress will be looked at to try an estimate their impact.
INTRODUCTION The major impact which the financial turmoil has brought is visible in areas such as Government Bond rates, Gross domestic product of the times, Interest rates, Money supply and Major Stock Prices. The gross domestic product is one of the most crucial indicators to measure the country’s economy and progress rate. GDP represents the total dollar value of all goods and services produced over specific time duration. The Great Depression time period had left a mark which is clearly visible even after 80 years since its conception, the current financial crisis situation is almost similar, though not the same intensity and as grave as it was before but still the savers can do nothing but watch their money disappear as the banking system weakens and financial institutions fail.
GDP is represented as a comparison to the previous quarter or year. A significant change in GDP has a considerable impact on the stock market, and a bad or regressing economy means lower stock prices as in the current times and the Great Depression of 1929.
References: Clayton A, 6th Oct, 2008, The 2008 Credit Crisis Versus the 1929 Depression, retrieved on 15th November, 2008, http://www.investmentpostcards.com/2008/10/07/the-2008-credit-crisis-versus-the-1929-depression/. Kuroda H, 16th November, 2005, "The Conundrums of Global Bond Markets - An Asian Perspective", retrieved on 16th November, 2008, http://www.adb.org/Documents/Speeches/2005/ms2005078.asp