This slide introduces the topic. The Great Depression was a global economic recession that emerged in 1929 and remained until approximately 1939. That was the lengthiest and most intense Recession that the western Industrialized world ever saw, causing vital differences in financial institutions, fiscal policies, and macroeconomics. Despite its origins in the United States, the Great Recession resulted in substantial reductions in yield, widespread unemployment, and severe falling prices for almost every nation (Siodla, 2021). The cultural and social consequences were devastating especially in the United States where the effects were major. The economic crisis was exceptionally long and severe in the United States and Europe, but it was relatively mild in Asia and most Central America.
This slide begins with the major factors that contributed to the great depression. The severity and timing of the economic crisis differed widely among countries. Possibly unsurprisingly, the global economy’s terrible depression in history was caused by various factors. Consumer spending drops, financial crisis, and misinformed government regulations all contributed to a drop in industrial productivity in the United States, whereas the gold standard, which connected well almost all countries around the world in a system of set foreign exchange rates, played a pivotal role in spreading the American Recession to many other states (Siodla, 2021). The withdrawal of the reference standard and the subsequent monetary stimulus fueled the healing from the Economic Crisis. The Great Depression had a massive fiscal effect, resulting in brutal death and suffering and tremendous changes in the financial legislation. Many banks closed down due to crash in economic activities.
This slide continues to give details of the economic recession. The Great Recession originated in the United States in the warmer months of 1929 as an ordinary recession. Nevertheless, the decline became significantly worse in late 1929 and lasted until 1933. Total output and costs both dropped sharply. Between both the maximum and lowest point of the Recession, the manufacturing industry in the United States fell by about 50 percent, while GDP Growth fell by around 30 percent. The actual price index fell by 30 percent. While there is a bit of disagreement concerning the durability of the numbers, it is commonly recognized that the unemployment rate surpassed 25 percent at its peak (Cortes et al., 2021).The magnitude of the Recession In the United States is highlighted once, especially in comparison to America’s next worst economic downturn, the Great Recession, which occurred between 2007 and 2009, wherein the nation’s GDP fell by only 5 percent, and the rate of unemployment reached its peak at much less than 20 percent.
This slide digs deeper into the topic. Almost every nation on the planet was affected by the Global Depressive episodes. Nevertheless, the decline’s date, time, and intensity diversified significantly from country to country. All through the 1920s, the United Kingdom battled with reduced economic recessions. Nevertheless, the nation did not enter a severe depression till 1930, as well as its apex decrease in manufacturing output was approximately a third of that of the US (Siodla, 2021). Other nations affected by the Recession were France, Italy, Germany, and Brazil, although the effect was not as much as it was experienced in the United States. The economic Recession was squarely very serious within the United States and nearly collapsed the United States’ economic system
This slide talks about the effect of the crisis. Many countries experienced the same overall falling prices as the United States. Wholesale prices dropped significantly in almost all the developed nations (Cortes et al., 2021). Stagflation in Japan was abnormally fast in 1931 because of the greater versatility of the Japanese pricing system. This swift devaluation may have contributed to the comparatively benign downturn in Japanese output. During this time, the price levels of predominant goods traded on global markets fell even further. The prices of these items were cut in half during this period of Recession. As a consequence, commodity price manufacturers’ trade terms fell significantly.
This next slide continues to addresses the impacts of the Great Depression. The United States began to salvage in 1933. Throughout the 1930s, output expanded rapidly: actual GDP increased at an annual rate of 10 percent. Nevertheless, production had dropped so far at the beginning of the 1930s and remained significantly less than its long pattern (Cortes et al., 2021). The United States faced another extreme recession in 1937; however, after 1938, the American economy expanded even faster than it was between 1932 and 1936. By 1942, the nation’s production eventually returned to its lengthy pattern. However, before this period of economic relief, beginning in 1942, the American economy was at risk of a drastic decline that would eventually collapse. The country generated fiscal policies that could see the economy rise once again.
This slide explains further, how the crisis happened. The preliminary decrement in US production in the warmer months of 1929 is generally ascribed to a strict US fiscal policy designed to limit stock price speculation. The 1920s was indeed a flourishing era, but not a particularly thriving one; price levels had stayed constant all through the period because there had been mild depressions between 1923 and 1926. The share market was the one apparent area of abundance (Bianchi, 2020). From the minimum in 1920 to the high point in 1928, share prices quadrupled. The Central Bank increased interest rates in 1928 to slow the sharp rise in asset values. Rising interest rates lowered investment spending in building and motor car buying, resulting in lower output. Some scholars think that a surge in house building in the 1920s resulted in a surplus housing supply and just a steep drop in building projects in 1928.
This slide makes up the conclusion. To sum up, the Great Depression had a significant impact on the world, especially on the United States economic system. The depression saw a decline in the dollar’s value, a rise in the prices of commodities in the United States, and a decline in international trade between America and the rest of the world as nations attempted to reclaim their economies from the depression. The United States, being at the center of the economic depression, attempted to structure policies that would see the end of the depression, which later led to the end of the depression, reclaiming the American economic status (Bianchi, 2020). In ad bid to end the long period of economic Recession, the United States adjusted fiscal policies that would increase the spending rates among the American people. This was done through a general review of the nation’s employment levels to ensure that most of her population accessed employment, which would result in increased spending, reducing the stock levels among manufacturers.
References
Bianchi, F. (2020). The great depression and the great recession: A view from financial markets. Journal of Monetary Economics, 114, 240-261.
Cortes, G. S., Taylor, B., & Weidenmier, M. D. (2021). Financial factors and the propagation of the Great Depression. Journal of Financial Economics.
Siodla, J. (2020). Debt and taxes: Fiscal strain and US city budgets during the Great Depression. Explorations in Economic History, 76, 101328.