Major Global Economic Crises Since 1929
ANALYSIS OF MAJOR GLOBAL ECONOMIC CRISES SINCE 1929: CAUSES, COURSE OF EVENTS AND CONSEQUENCES
2nd year Economics and Politics students Donatas Bimba Tomas Dubinskas Justas Gaubys
Vilnius, 2012
Major Crises since 1929
• • • • • • The Great Depression 1973 Oil Crisis The Japanese Asset Price Bubble in 1990s 1997-1998: Asian Financial Crisis Global Financial Crisis European Debt Crisis
The Great Depression
Causes of crisis
• • • • • Rapid growth before crisis. 1929 October until 1932 June (S&P) decreased around 85%. Unemployment. Consumption and industrial trades declining. Widespread bank failures.
Unemployment
Fed impact
• FED could not avoid about 10,000 banks bankruptcy . • Huge decrease in Money supply.
Deflation
Source: Historical Statistics of the United States, U.S Department of Commerce.
Consequences
• Effect whole capitalistic world • Greater role of the state in economy. • New Deal
1973 Oil Crisis
• A group of small and economically underdeveloped countries acting through the OPEC imposed oil embargo, cut the production and increased prices of oil
The Rise of OPEC
• The Organization of Petroleum Exporting Countries (OPEC) was formed on September 14, 1960 • Thirteen countries controlled over 85% of world oil exports • In June 1968, OPEC issued a Declaratory Statement stating that the governments had a right to participation in ownership
Reasons of the Oil Crisis
• The demand for energy was increasing rapidly • World consumption of oil grew at the very fast rate of 10.6 percent per annum in 1969-73 • Only Middle East and Africa showed increase in oil production • Other countries had to import • United States imports of oil started to rise rapidly and reached 35% by 1973 • Other resources of energy were neglected, because of the belief that the unlimited amounts of cheap oil is available • Inter-Arab relations and Israel
Events of the Crisis
• In May 1973 a prominent Arab oil expert, had recommended
2nd year Economics and Politics students Donatas Bimba Tomas Dubinskas Justas Gaubys
Vilnius, 2012
Major Crises since 1929
• • • • • • The Great Depression 1973 Oil Crisis The Japanese Asset Price Bubble in 1990s 1997-1998: Asian Financial Crisis Global Financial Crisis European Debt Crisis
The Great Depression
Causes of crisis
• • • • • Rapid growth before crisis. 1929 October until 1932 June (S&P) decreased around 85%. Unemployment. Consumption and industrial trades declining. Widespread bank failures.
Unemployment
Fed impact
• FED could not avoid about 10,000 banks bankruptcy . • Huge decrease in Money supply.
Deflation
Source: Historical Statistics of the United States, U.S Department of Commerce.
Consequences
• Effect whole capitalistic world • Greater role of the state in economy. • New Deal
1973 Oil Crisis
• A group of small and economically underdeveloped countries acting through the OPEC imposed oil embargo, cut the production and increased prices of oil
The Rise of OPEC
• The Organization of Petroleum Exporting Countries (OPEC) was formed on September 14, 1960 • Thirteen countries controlled over 85% of world oil exports • In June 1968, OPEC issued a Declaratory Statement stating that the governments had a right to participation in ownership
Reasons of the Oil Crisis
• The demand for energy was increasing rapidly • World consumption of oil grew at the very fast rate of 10.6 percent per annum in 1969-73 • Only Middle East and Africa showed increase in oil production • Other countries had to import • United States imports of oil started to rise rapidly and reached 35% by 1973 • Other resources of energy were neglected, because of the belief that the unlimited amounts of cheap oil is available • Inter-Arab relations and Israel
Events of the Crisis
• In May 1973 a prominent Arab oil expert, had recommended