Many historians believe that the immediate cause of The Great Depression was the Stock Market Crash in the fall of 1929. That event occurred on October 29, 1929; also known as Black Tuesday. It also marked the end of the era known as The Roaring Twenties. On that day stocks plummeted to an all-time low, causing mass devastation. However like history has shown, a time of economic prosperity, like the Roaring Twenties, result in a depression.
The Severe Causes and Effects of the Great Depression The Great Depression was a severe and brutal worldwide economic downturn 10 years after World War 2 starting in 1929 to the early 1940’s. It was the longest, most widespread and deepest depression of the 20th century, the worse the economy had ever seen. Whether the economy would recover from this was uncertain since the effects of this depression was so devastating. The collapse of the stock market, loss of jobs, bank failures and the withdrawal of purchases are just some of the severe causes and effects of the Great Depression. There was a combination of domestic and worldwide conditions that led to the Great Depression.
The Great Depression All economies experience both expansionary and recessionary periods throughout their history. However, until most recently, the one recession that has had a well-known impact around the world is “The Great Depression of 1929”. The Great Depression is a great example of how horribly the world’s economy can collapse. This recessionary period is directly correlated with the United States Stock Market Crash on October 29, 1929 which is also known as “Black Tuesday.” This recession affected industrialized countries worldwide making it become a global recession. The main misconception of The Great Depression is that it was a sudden and consistent collapse in the stock market.
However it can be argued that the roots of Hitler’s appointment as Chancellor in January 1933 lie in the disaster of the Wall Street Crash of 1829 and the subsequent depression. This economic crash and the rise in unemployment had the important effect of further polarising German politics. The fact that Germany’s growth in the 1920’s had been funded by American capital which was now forced to withdraw hit Germany’s industry hard. Furthermore it was unemployment and the consequential insecurity that so undermined confidence in the present structures. By 1933 over 6 million German workers were unemployed.
The economy plummeted and everyone felt the effects of it .The severe downfall of the American economy in the 1930’s known as the Great Depression was the result of speculation and installment buying, income maldistribution, and overproduction throughout America. After the roaring 20’s, speculation and installment buying drastically increased
The recession is all over the news, and how it is changing how American’s think, act, and spend today. In a recent article in USA Today, the effect of the recent recession and strained economy is reaching everyone, and reshaping lives. The weak economy is restructuring what people have grown accustomed to in past decades. The dismal economy is having a profound effect on life in the United States; from delaying marriages and divorce to reducing car and home ownership, and private school enrollment (Recession reshapes life in USA, 2011). The recent downturn in the economy is wreaking havoc on the American standard of living and forcing more cutbacks into an already frugal lifestyle.
The Great Depression was a macroeconomic catastrophe that had far-reaching effects into nearly every sector of the worldwide economy, causing high rates in unemployment and declines in output, prices, and personal income in most industrialised nations. Due to the tragic nature of the period, much time and energy has been spent examining the causes that led a recession similar to other historical episodes to become a long lasting and infamous depression. Recent research indicates that while fiscal policy failures most likely initially brought about an economic downturn, it was deepened and prolonged by the failures of central bank monetary policies due to inaction on the part of the Federal Reserve (Bernanke, 1983). However, detractors from this monetarist position claim that the problem relative to money in the economy at the time was actually a result of the problematic interwar gold standard (Hamilton, 1987). By first examining the monetarist view as advocated by Friedman and Schwartz then examining the gold standard hypothesis, it becomes clear that while a substantial fall in money supply did occur during the years of the depression, such a fall should be attributed to the difficulties encompassed by the international gold standard rather than irresponsibility and inaction on the part of the Federal Reserve (Friedman and Schwartz, 1993; Eichengreen 1992).
The causativefactors of the Great Depression are still a debatable issue for historians and economists. For many people however,the period is attributed to the stock market crash of 1929. However, there lacka consensus about the causes of the economiccrisis which worsened into a depression. May be some of the most important questions to ask while analyzing the causes of the great depression includes questioning on the reason why the citizens were overconfident in the stock market prior to the great depression, how the consumption psychology structured the causes and impacts of the crash, the patterns of investment in the stock market in 1920s, the main investors and Hoover’s reference of an economic crisis as a depression. This paper shall analyses the probable causes of the Great Depression and its impact.
Effects and Results of the Great Depression During the year of 1929 a tragic event happened that affected the United States of America for the worst. This event is known as the American Great Depression. It was a crash in the stock market that sent the United States into an economic downfall of the greatest proportion. This occurrence lasted from 1929 up until 1941, when the United States supposedly wasn’t in the war. Thus these are basic events leading to and resulting from the stock market crash of 1929.
Nation debt reached an all time high in the trillions, American jobs were being outsourced and the stock market was at a record low. Americans were afraid. Afraid that our weakness would be seen by our adversaries as an opening to attack. The nation was in dire need of not only a president, but a leader. One who understood the problems the average American was facing.