Great Depression of 1929
The Great Depression was a worldwide economic downturn which started in October of 1929 and lasted through most of the 1930s. It began in the United States and quickly spread to Europe and every part of the world, with devastating effects in both industrialized countries and producers of raw materials. International trade declined sharply, as did personal incomes, tax revenues, prices and profits. Cities all around the world were hit hard, especially those based on heavy industry. Unemployment and homelessness soared. Construction was virtually halted in many countries. Farming and rural areas suffered as prices for crops fell by 4060%. Mining and logging areas had perhaps the most striking blow because the demand fell sharply and there were few employment alternatives. The Great Depression ended at different times in different countries. Most countries set up relief programs, and most underwent some sort of political upheaval, pushing them to the left or right. Democracy was weakened and on the defensive, as dictators such as Hitler, Stalin and Mussolini made major gains, which helped set the stage for World War II in 1939.
Causes of the Great Depression
Business cycles are a normal part of living in a world of inexact balances between supply and demand. What turns a usually mild and short recession or "ordinary" business cycle into a great depression is a subject of debate and concern. Scholars have not agreed on the exact causes and their relative importance. The search for causes is closely connected to the question of how to avoid a future depression, so the political and policy viewpoints of scholars are mixed into the analysis of historic events eight decades ago. The even larger question is whether it was largely a failure on the part of free markets, or largely a failure on the part of governments to prevent widespread bank failures and the resulting panics and reduction in the money supply. Those who believe in a large role for governments in the
Causes of the Great Depression
Business cycles are a normal part of living in a world of inexact balances between supply and demand. What turns a usually mild and short recession or "ordinary" business cycle into a great depression is a subject of debate and concern. Scholars have not agreed on the exact causes and their relative importance. The search for causes is closely connected to the question of how to avoid a future depression, so the political and policy viewpoints of scholars are mixed into the analysis of historic events eight decades ago. The even larger question is whether it was largely a failure on the part of free markets, or largely a failure on the part of governments to prevent widespread bank failures and the resulting panics and reduction in the money supply. Those who believe in a large role for governments in the