The Great Depression was a severe economic crisis that took place in the 1930s, affecting the global economy and causing widespread social and political upheaval. In this lesson, we will explore the basic concepts of The Great Depression, its history, and its impact on the world.
Causes of The Great Depression
There were several causes of The Great Depression, including:
- Stock market crash – The stock market crash of 1929 is often cited as the trigger of The Great Depression, as it caused panic and led to a significant decline in consumer spending.
- Banking crisis – The banking system was unstable, with many banks failing due to risky lending practices and a lack of regulation.
- Overproduction – There was an excess supply of goods and products that could not be sold due to a decrease in consumer demand.
- Protectionism – Many countries implemented protectionist policies, such as tariffs and trade barriers, which reduced international trade and worsened the global economic situation.
History of The Great Depression
The Great Depression began in 1929, after the stock market crash in October of that year. The crisis affected many countries, with the United States being hit the hardest. The depression lasted throughout the 1930s, and although there were some signs of recovery in the mid-1930s, it was not until World War II that the global economy fully recovered.
Impact of The Great Depression
The Great Depression had a profound impact on the world, with its effects felt for many years after the crisis ended.
- Unemployment – Millions of people lost their jobs, with unemployment rates reaching 25% in some countries.
- Poverty – Many people were plunged into poverty, and there was a significant increase in homelessness and hunger.
- Political upheaval – The depression led to the rise of extremist political movements, including fascism and communism.
- New Deal – The Great Depression led to the implementation of the New Deal policies in the United States, which aimed to address the economic and social issues caused by the crisis.