The Great Depression Name: Instructor: Task: Date: The Great Depression The great depression denotes a period within which the global economy was in a deplorable state. The depression commenced in America with the plummeting of values of stock. This resulted in decreased market confidence…
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This write-up will discuss events which contributed to this economic crisis and its consequences. The events that resulted in this calamity include poor economic policies, malpractices and increased tariffs (Ross 1998, p. 183). In the late 1920s, there were no adequate regulations which governed trading in America’s stock exchanges. Consequently, traders exploited these shortcomings to their benefit. Overall, the investors’ funds were vulnerable to unscrupulous traders. Unscrupulous trading in the stock market was one of the triggers of stock market failure. Subsequently, the values of shares began to plunge. The decrease in the value set off events in other industries, which culminated in this economic calamity. However, historians and economists argue that the decrease in the value of stocks in the market was not the cause, but a symptom of an impending economic calamity. Decreased market confidence resulted from the general failure in entities, poor policies such as increased taxation and dismal performance of other industries. According to economists, the collapse of markets denotes the final symptom of an eminent economic calamity. Although the collapse of the stock market may be a symptom rather than a cause, the resultant panic caused rapid deterioration of the economy in both America and the globe (Robbins 1971, p. 90). It is vital to realize that the great depression was a culmination of the coupling of various factors. Such factors included unfavourable tariffs. There was a general rise in the tariffs to finance the governmental operations. However, the higher taxes resulted in the government having more funds. During this period, governments undertook rearmament programmes. Subsequently, vital industries did not receive appropriate funding to stimulate the economy. Despite the imperialist policies adopted by nations, there were positive attributes from nations spending massively on defence programmes. Government globally were able to employ additional workforce. The massive defence expenditure did not improve the economy. Therefore, it denied the economy vital resources that would have improved nations further. The military ambitions were realized at the expense of the global economy (Lied 2002, p. 234). During this era, the international trade was not properly developed. Additionally, the emergence of global alliances hindered trade further. Globalization was inexistent; hence, economic panic due to failure of stock markets in America resulted in an economic calamity. If international trade had been properly developed, it would have mitigated the impact of the Great Depression. It would have provided optimism in the economic sectors globally. However, the existing global alliances, which pitted Germany and the United Kingdom (UK) against each other, only made the situation dire (Smiley 2002, p.153). Countries only traded in their alliances; thus, there was minimal business among nations such as the UK and Germany, which represented the global economic forces. Such enmity hindered trade among nations that would have mitigated the depression. Global politics had massive implications on the depression. Proper politics would have enacted measures that would have encouraged economic improvements. However, the political stands during this era resulted in further degradation of the economy (Klein 1947, p.157). The Great Depression was global; hence, there were numerous factors which triggered its occurrence. While the collapse of the
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(Causes and Consequences of the Great Depression Essay)
“Causes and Consequences of the Great Depression Essay”, n.d. https://studentshare.org/history/1456418-what-where-the-main-causes-and-consequences-of-the.
It all started in 1929 and the world trade shrank by more than 50 percent. The great depression is known as the worst economic decline in modern economics history. Employment decreased greatly all over the world and poverty reached new levels.
It was the longest and most destructive depression ever felt by the industrialized western world. The great depression was rooted in the US but rapidly turned into a global economic slump owing to the special and friendly relationship that had been forged between the US and European economies after World War I.
In this context, an economic crisis is defined as a period that is characterized with declining prices and output by more than 10 percent. The rate of unemployment also seems to increase during the period of economic depression. Based on these notions, in an old joke it has been stated that “a recession is when your neighbor loses his or her job; a depression is when you lose your job”1.
The middle class was inching closer to luxury with the money it had made in investment markets. All signs were pointing up. It was precisely this shared spirit of unbridled optimism, however, that led to the crash and the subsequent depression; the Thirties were particularly horrific specifically because few, in their boom-era delirium, had foreseen that the wave, so long cresting, must eventually break.
The result was an international economic breakdown which impacted nearly every country in the world. Global economic implications of the Depression included an almost universal decline in national economic productivity and skyrocketing – as well as
Many people lost their jobs, savings, homes and hope during the decade long economic depression. Thousands of businesses and banks shut their doors too. Both the helpful and damaging impacts of government intervention,
Women became full of life and started drinking, wearing short skirts and worse of all, smoking same to men (Freedman 61). Many average American bought automobiles accosted by household appliances on credit. In as much as many businesses grew by 65% from
The breadth and depth of the both crises and in particular the suffering that resulted from the great depression is legendary. The global financial crises that lead to recession in 2007 had been predicted to
By far, this is the period in history which shaped the development of the American society for many decades further. That is why a careful examination of it is likely to provide valuable sociological insights.