Key Points
A global economic crisis that began in 1929 and lasted over a decade.
Triggered by the U.S. stock market crash, worsened by bank failures, trade restrictions, and collapsing demand.
Recovery came through government programs like the New Deal and WWII production.
Led to lasting economic reforms and safety nets.
What Was the Great Depression?
The Great Depression was a worldwide economic collapse beginning in 1929. It caused widespread unemployment, poverty, and industrial decline. It remains a major turning point in global economic policy.
Main Causes
Stock Market Crash (1929): Overvalued stocks collapsed, wiping out savings.
Bank Failures: Massive bank runs led to financial panic and loss of public trust.
Trade Decline: Protectionist tariffs reduced global commerce.
Falling Demand: High unemployment lowered spending, deepening the crisis.
Global Impacts
Unemployment reached 25% in some countries.
Business Failures became widespread.
Poverty and homelessness increased sharply.
Political Shifts emerged, with unrest and the rise of extreme ideologies.
Recovery Efforts
The New Deal #US : Introduced job creation, banking reforms, and welfare programs.
World War II: Massive production needs led to economic revival through job growth and industrial expansion.
Lasting Legacy
Stronger financial regulations.
Introduction of welfare systems like Social Security and unemployment insurance. Greater government involvement in economic stability.
Conclusion
The Great Depression reshaped global economics, highlighting the importance of regulation, proactive governance, and economic safeguards. Its lessons continue to influence financial systems today.