Great Depression

What is the great depression

The Great Depression or Crisis of 29 is known as a breakdown of the international economy that took place in 1929. The Great Depression lasted throughout the 1930s in some countries, and until the 1940s even in others. , adding to the causes of World War II.

The Great Depression gained momentum with the so-called crash of 29 or Black Thursday in the United States of America, which consisted of the dramatic crash of the New York Stock Exchange that occurred on October 29, 1929.

This episode not only brought about a significant contraction of the local economy but, when added to other developing international problems, it generated a true economic debacle on a world scale.

Unlike the hyperinflationary episodes of the 1919-1923 period, the Great Depression of 1929 was a deflationary crisis.

Causes of the Great Depression

  • Inability to stabilize the economy after the First World War.
  • Lack of coordination in the gold standard.
  • Restriction of international loans by the US.
  • Economic imbalance between the US and the rest of the world.
  • Overproduction of consumer goods.
  • Stock market speculation and the Crash of 29.

Consequences of the Great Depression

  • Discredit of the liberal economy.
  • At first, extreme restrictive and austerity measures that strengthened the vicious circles of the crisis.
  • Rise of totalitarian regimes such as fascism and national socialism.
  • From 1933, interventionist measures:
    • The economic model of Nazi Germany.
    • Implementation of the New Deal in the US (1933).
  • Stagnation of the process of international economic integration.
  • Fall of international trade.
  • Abandonment of the gold standard.
  • High unemployment rates.
  • Bank crash.
  • Fall in consumption.
  • breakdown of the middle class.
  • Social crisis caused by the absence of protection policies for the most disadvantaged sectors.
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