SUMMARY ON GREAT DEPRESSION
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Worldwide economic downturn that began in 1929 and lasted until about 1939. It was the longest
And most severe depression ever experienced by the industrialized western world. Although the
Depression originated in the united states, it resulted in drastic declines in output, severe
Unemployment, and acute deflation in almost every country of the globe. But its social and
Cultural effects were no less staggering, especially in the united states, where the great
Depression ranks second only to the civil war as the gravest crisis in american history
The depression was particularly long and severe in the united states and europe; it was milder
In japan and much of latin america. Perhaps not surprisingly, the worst depression ever
Experienced stemmed from a multitude of causes. The great depression brought about
Fundamental changes in economic institutions, macroeconomic policy, and economic theory
In the united states, the great depression began in the summer of 1929. The downturn
Became markedly worse in late 1929 and continued until early 1933. Real output and prices fell
Precipitously. Between the peak and the trough of the downturn, industrial production in the
United states declined 47 percent and real gdp fell 30 percent. The wholesale price index
Declined 33 percent (such declines in the price level are referred to as “deflation”).
The severity of these declines
Becomes especially clear when they are compared with america’s next worst recession of the
20th century, that of 1981–82, when real gdp declined just 2 percent and the unemployment rate
Peaked at under 10 percent. Moreover, during the 1981– 82 recession prices continued to rise,
Although the rate of price increase slowed substantially (a phenomenon known as “disinflation”).
Great britain struggled with low growth and
Recession during most of the second half of the 1920s, due largely to its decision in 1925 to
Return to the gold standard with an...