What Caused The Great Depression

The Great Depression is a phrase that is used to describe a global economic crisis that took place in the 1930s. The exact timing of the depression differs between countries, however, in the majority of nations it began during the 1930s. The depression was characterized by a decrease in the global GDP by approximately fifteen percent (Brunner, 2012). The impacts of the depression were devastating and they included a significant reduction in income, profits and tax revenue. In addition, there was also a reduction in the level of international trade. In the majority of countries, the level of unemployment rose by approximately thirty-three percent, whilst in the United States it increased by twenty five percent (Brunner, 2012). Virtually all
The chain of events that are associated with this theory include debt liquidation and the contraction of monetary supply. Following the paying off of loans, there was a reduction in the value of assets, and profits made by businesses. There was pessimism and people began hoarding money. The end result was an increase in deflation adjusted rates of interest. Another theory is that of productivity shock, which involved the surge in mass production and electrification (Saint-Etienne, 2013). In addition, there was an increase in the farm machinery and motorization of transportation. Hence, the increase in the level of production led to an excessive amount of production. Hence, there was an increased amount of excess production, which led to a reduction in prices and the foreclosure of many
Many individuals are critical of his efforts and he is notoriously regarded as one of the least caring presidents. The approach taken by Hoover was mainly aimed at restoring the level of confidence people have in the economy and banking system. In the process, Hoover provided authorization for farmers and agricultural businessmen to stop bankruptcy. Another feature of the approach that was taken by Hoover is rugged individualism, whereby, each individual should fend for him or herself (Brunner, 2012). However, the approached by President Hoover were insignificant and harmful to the American community. The economic situation continued to worsen and one of the underlying problems was not