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A history of the economic depression in the united states during the 1930s

What brought about the worst economic downturn in modern history? Economic history The timing and severity of the Great Depression varied substantially across countries. Perhaps not surprisingly, the worst depression ever experienced by the world economy stemmed from a multitude of causes.

Declines in consumer demandfinancial panicsand misguided government policies caused economic output to fall in the United States, while the gold standardwhich linked nearly all the countries of the world in a network of fixed currency exchange ratesplayed a key role in transmitting the American downturn to other countries.

The recovery from the Great Depression was spurred largely by the abandonment of the gold standard and the ensuing monetary expansion. The economic impact of the Great Depression was enormous, including both extreme human suffering and profound changes in economic policy.

Timing and severity The Great Depression began in the United States as an ordinary recession in the summer of 1929.

The Great Depression and World War II, 1929-1945

The downturn became markedly worse, however, 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 gross domestic product GDP fell 30 percent.

The wholesale price index declined 33 percent such declines in the price level are referred to as deflation. Although there is some debate about the reliability of the statistics, it is widely agreed that the unemployment rate exceeded 20 percent at its highest point. The Depression affected virtually every country of the world. However, the dates and magnitude of the downturn varied substantially across countries.

Great Depression History

Table 1 shows the dates of the downturn and upturn in economic activity in a number of countries. Table 2 shows the peak-to-trough percentage decline in annual industrial production for countries for which such data are available.

  1. The attack on the United States disarmed the appeal of isolationists and permitted quick military mobilization. Finally, in desperation, they chose to sacrifice liberty in the hope of getting something to eat.
  2. Battling for its survival against Nazi Germany, Britain was unable to resist, withdrawing from Shanghai and temporarily closing the Burma Road. It is appropriate to call it a vision.
  3. In the summer of 1940, Japan won permission from the weak Vichy government in France to use airfields in Indochina. By 1932, some thirteen million Americans were out of work, one out of every four able and willing workers in the country.

Great Britain struggled with low growth and recession during most of the second half of the 1920s. Britain did not slip into severe depression, however, until early 1930, and its peak-to-trough decline in industrial production was roughly one-third that of the United States. France also experienced a relatively short downturn in the early 1930s.

  • And as the sense of immediate crisis eased, new demands emerged;
  • The much-debated "unconditional surrender" formula that FDR announced at Casablanca in January 1943 was primarily intended to reassure the Soviets that the Americans and British, too, were committed to seeing the war through to the extinction of the Nazi regime, which eventually came on May 8, 1945;
  • In the end, the interventionist argument won a protracted public debate, aided in large measure by the work of the Committee to Defend America by Aiding the Allies.

The French recovery in 1932 and 1933, however, was short-lived. French industrial production and prices both fell substantially between 1933 and 1936.

Great Depression

The decline in German industrial production was roughly equal to that in the United States. A number of countries in Latin America fell into depression in late 1928 and early 1929, slightly before the U. While some less-developed countries experienced severe depressions, others, such as Argentina and Brazilexperienced comparatively mild downturns. Japan also experienced a mild depression, which began relatively late and ended relatively early. Peak-to-trough decline in industrial production in various countries annual data country.