Explain the causes of the great depression

The worldwide economic downturn known as the Great Depression began in 1929 and lasted until about 1939. It caused steep declines in output, severe unemployment, and acute deflation and led to extreme human suffering and profound changes in economic policy. The Depression touched nearly every country of the world after first arising in the United States, where its social and cultural effects were especially profound. Facts Also Known As Depression of 1929 • Slump of 1929 Date 1929 - c. 1939 Location Context Background Top Questions The Great Depression, which began in the United States in 1929 and spread worldwide, was the longest and most severe economic downturn in modern history. It was marked by steep declines in industrial production and in prices (deflation), mass unemployment, banking panics, and sharp increases in rates of poverty and homelessness. Four factors played roles of varying importance. (1) The stock market crash of 1929 shattered confidence in the American economy, resulting in sharp reductions in spending and investment. (2) Banking panics in the early 1930s caused many banks to fail, decreasing the pool of money available for loans. (3) The gold standard required foreign central banks to raise interest rates to counteract trade imbalances with the United States, depressing spending and investment in those countries. (4) The Smoot-Hawley Tariff Act (1930) imposed steep tariffs on many industrial and agricultural goods, inviting retaliatory measures that...

What finally ended the The Great Depression was the worst economic crisis in U.S. history. From 1931 to 1940 unemployment was always in double digits. In April 1939, almost ten years after the crisis began, more than one in five Americans still could not find work. On the surface, Some economists— Even President Roosevelt and his New Dealers sensed that war spending was not the ultimate solution; they feared that the Great Depression—with more unemployment than ever—would resume after Hitler and Hirohito surrendered. Yet FDR’s team was blindly wedded to the federal spending that (as I argue in New Deal or Raw Deal?) had perpetuated the FDR had halted many of his New Deal programs during the war—and he allowed Congress to kill the WPA, the CCC, the NYA, and others—because winning the war came first. In 1944, however, as it became apparent that the Allies would prevail, he and his New Dealers prepared the country for his New Deal revival by promising a second bill of rights. Included in the President’s package of new entitlements was the right to “adequate medical care,” a “decent home,” and a “useful and remunerative job.” Roosevelt’s death in the last year of the war prevented him from unveiling his New Deal revival. But President Harry Truman was on board for most of the new reforms. In the months after the end of the war, Truman gave major speeches showcasing a full employment bill—with jobs and spending to be triggered if people failed to find work in the private sector...

Many factors likely contributed to the collapse of the stock market. Among the more prominent causes were the period of rampant speculation (those who had bought stocks on margin not only lost the value of their investment, they also owed money to the entities that had granted the loans for the stock purchases), tightening of This article was most recently revised and updated by

• The Great Recession refers to the economic downturn from 2007 to 2009 after the bursting of the U.S. housing bubble and the global financial crisis. • The Great Recession was the most severe economic recession in the United States since the Great Depression of the 1930s. • In response to the Great Recession, unprecedented fiscal, monetary, and regulatory policy was unleashed by federal authorities, which some, but not all, credit with the subsequent recovery. Understanding the Great Recession The term "Great Recession" is a play on the term "Great Depression" of the 1930s, when While no explicit criteria exist to differentiate a depression from a severe recession, there is a near consensus among economists that the downturn of 2007-2009 was not a depression. During the Great Recession, U.S. GDP declined by 0.3% in 2008 and 2.8% in 2009, while unemployment briefly reached 10%. Other causes the report identified included excessive borrowing by consumers and corporations, along with lawmakers who did not fully understand the collapsing financial system. This created asset bubbles, especially in the housing market as mortgages were extended at low interest rates to unqualified borrowers who subsequently could not repay them. The ensuing selloff caused housing prices to fall and left many other homeowners underwater. This, in turn, severely impacted the market for the Origins and Consequences The 2001 Dotcom bubble implosion followed by the World Trade Center attacks of Septe...

INTERNATIONAL IMPACT OF THE GREAT DEPRESSION Any analysis of the WORLD WAR I: THE PROBLEM OF INDEBTEDNESS All wars are inflationary and War needs radically altered international indebtedness. In order to pursue the conflict with full vigor, the British and French governments borrowed extensively from U.S. private lenders and also, after America had joined the conflict in April 1917, from the The British and the French did not worry unduly as they ran up a large war debt bill because they assumed that a vanquished Germany would meet the costs of the war. In 1921 a reparations total was agreed upon by the non-U.S. allies and imposed upon Germany. The Germans viewed the reparations bill as outrageous and the sum far too large for them to pay. The victors were convinced that Germany could pay if its exports were competitive and the foreign currency they earned was transferred to the Allies. However, the prospect of maintaining a low-wage, high-tax economy for many decades after the hardships of war and postwar turmoil had no appeal to Germans. The The war created a new group of indebted nations and transformed the United States, the world's leading debtor nation in 1914, into the status of leading creditor nation four years later. During the 1920s the United States assumed the role of leading international lender. WORLD WAR I: PRIMARY PRODUCTS High war prices encouraged the producers of foodstuffs and raw materials to expand output. Indeed, many countries were prepared to go i...

At age thirty-nine, Roosevelt contracted polio. He lost the use of his legs for the rest of his life, though the public was largely unaware of his disability. (In private, he moved around by wheelchair. In public, supported by steel leg braces and assistants, he could walk short distances.) His life experiences forged a man whose easygoing manner belied an interior toughness. 2 ^2 2 squared In his 1932 run for the presidency, Roosevelt asserted that he would help “the forgotten man at the bottom of the economic pyramid,” and pledged himself to “a new deal for the American people.” In his First Inaugural Address, saying “the only thing we have to fear is fear itself,” he sought to reassure the public amid the anxieties of the 3 ^3 3 cubed On March 12, 1933, Roosevelt delivered the first of his live-radio “ fireside chats.” In the first chat he spoke about the banking crisis and explained the actions he and Congress had taken to address it. During his presidency he delivered thirty “fireside chats,” explaining to the public in reassuring tones and plain-spoken language his New Deal policies and the 5 ^5 5 start superscript, 5, end superscript In an ill-fated move in 1937, President Roosevelt sought to pack the US Supreme Court, which had ruled against many of his programs, with justices who would be more favorable to the New Deal. His “ court packing” plan called for adding an additional justice to the Court for every justice over the age of 70. The measure was widely denoun...

On the surface, everything was hunky-dory in the summer of 1929. The total wealth of the United States had almost doubled during the When the bubble burst in spectacular fashion in October 1929, many economists, including John Kenneth Galbraith, author of The Great Crash 1929, blamed the worldwide, decade-long The reality is more complex. Sure, without all that uncontrolled and irrational market speculation, the 1930s might be recalled simply as a period when the economy and prosperity stalled. But just why—and how—could those gamblers dominate the stock market? And why did a crisis in the markets become a systemic decade-long economic catastrophe during which unemployment skyrocketed to 25 percent and the cost of goods and services plunged? By 1933, dozen eggs cost only 13 cents, down from 50 cents in 1929. Banks failed—between a third and half of all U.S. financial institutions collapsed, wiping out the lifetime savings of millions of Americans. The familiar narrative of the Great Depression places banks among the institutions that suffered fallout from the crisis. In fact, in the eyes of such luminaries as Ben Bernanke, an economic historian and former head of the Federal Reserve, the crisis was all about the banks—from the central bank (the Fed itself), down to the smallest savings institutions. “Regarding the Great Depression…we did it,” Bernanke said in a 2002 speech, referring primarily to the Fed’s role. “We’re sorry.” Here are four ways banks "did it": Banks Exten...