Great Depression

DepressionThe Great DepressionDepression eraDepression-erathe depressioneconomic depressioneconomic crisisDepression years1929 economic crisisworldwide depression
The Great Depression was a severe worldwide economic depression that took place mostly during the 1930s, beginning in the United States.wikipedia
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Great Depression in the United States

Great DepressionDepressionthe Depression
The Great Depression was a severe worldwide economic depression that took place mostly during the 1930s, beginning in the United States.
The Great Depression began with the Wall Street Crash in October 1929.

Cities in the Great Depression

Cities all around the worldCanadian Cities in the Great DepressionCities around the world were hit
Cities around the world were hit hard, especially those dependent on heavy industry.
Throughout the industrial world, cities were hit hard during the Great Depression, beginning in 1929 and lasting through most of the 1930s.

Depression (economics)

economic depressiondepressiondepressions
The Great Depression was a severe worldwide economic depression that took place mostly during the 1930s, beginning in the United States.
Today the term "depression" is most often associated with the Great Depression of the 1930s, but the term had been in use long before then.

Protectionism

protectionisttariff reformprotection
Frantic attempts to shore up the economies of individual nations through protectionist policies, such as the 1930 U.S. Smoot–Hawley Tariff Act and retaliatory tariffs in other countries, exacerbated the collapse in global trade.
Some scholars have implicated protectionism as the cause of some economic crises, most notably the Great Depression.

Economy of the United States

U.S. economyeconomyAmerican economy
The decline in the U.S. economy was the factor that pulled down most other countries at first; then, internal weaknesses or strengths in each country made conditions worse or better.
For many years following the Great Depression of the 1930s, when danger of recession appeared most serious, the government strengthened the economy by spending heavily itself or cutting taxes so that consumers would spend more, and by fostering rapid growth in the money supply, which also encouraged more spending.

Dust Bowl

DustbowlDirty Thirtiesdust storms
In addition, beginning in the mid-1930s, a severe drought ravaged the agricultural heartland of the U.S.
Many of these families, who were often known as "Okies" because so many of them came from Oklahoma, migrated to California and other states to find that the Great Depression had rendered economic conditions there little better than those they had left.

Debt deflation

debt-deflationdeflationary policiesexcess debt can cause a continuing deflation
Today the controversy is of lesser importance since there is mainstream support for the debt deflation theory and the expectations hypothesis that — building on the monetary explanation of Milton Friedman and Anna Schwartz — add non-monetary explanations.
The theory was developed by Irving Fisher following the Wall Street Crash of 1929 and the ensuing Great Depression.

Heterodox economics

heterodoxheterodox economistsheterodox economist
There are also various heterodox theories that downplay or reject the explanations of the Keynesians and monetarists.
Other heterodox schools active before and during the Great Depression included Technocracy and Georgism.

Great Contraction

The Great Contraction
They argued that the Great Depression was caused by the banking crisis that caused one-third of all banks to vanish, a reduction of bank shareholder wealth and more importantly monetary contraction of 35%, which they called "The Great Contraction".
The Great Contraction is economist Milton Friedman's term for the recessionary period from 1929 until 1933, i.e., the early years of the Great Depression.

Milton Friedman

FriedmanFriedman, MiltonMilton
Today the controversy is of lesser importance since there is mainstream support for the debt deflation theory and the expectations hypothesis that — building on the monetary explanation of Milton Friedman and Anna Schwartz — add non-monetary explanations.
During his time at Rutgers, Friedman became influenced by two economics professors, Arthur F. Burns and Homer Jones, who convinced him that modern economics could help end the Great Depression.

Anna Schwartz

Anna J. SchwartzAnna Jacobson SchwartzSchwartz
Today the controversy is of lesser importance since there is mainstream support for the debt deflation theory and the expectations hypothesis that — building on the monetary explanation of Milton Friedman and Anna Schwartz — add non-monetary explanations.
Schwartz collaborated with Milton Friedman on A Monetary History of the United States, 1867–1960, which was published in 1963.[[Anna Schwartz#cite note-2| [2] ]] This book placed the blame for the Great Depression at the door of the Federal Reserve System.

Deflation

deflationarydeflationary spiralmoney supply contracted
By mid-1930, interest rates had dropped to low levels, but expected deflation and the continuing reluctance of people to borrow meant that consumer spending and investment were depressed.
It was proposed as a theory by Irving Fisher (1933) to explain the deflation of the Great Depression.

Say's law

law of marketssupply creates its demandsupply creates its own demand
At the beginning of the Great Depression, most economists believed in Say's law and the equilibrating powers of the market, and failed to explain the severity of the Depression.
During the worldwide Great Depression of the 1930s, the theories of Keynesian economics disputed Say's conclusions.

Bank of United States

New York Bank of the United StatesNew York Bank of United States
The Federal Reserve allowed some large public bank failures – particularly that of the New York Bank of United States – which produced panic and widespread runs on local banks, and the Federal Reserve sat idly by while banks collapsed.
The bank run on its Bronx branch is said to have started the collapse of banking during the Great Depression.

Andrew Mellon

Andrew W. MellonMellonAndrew William Mellon
Economists like Barry Eichengreen and J. Bradford DeLong point out that President Herbert Hoover tried to keep the federal budget balanced until 1932, when he lost confidence in his Secretary of the Treasury Andrew Mellon and replaced him.
Mellon's national reputation collapsed following the Wall Street Crash of 1929 and the onset of the Great Depression.

Long Depression

Depression of 1873–79depressioneconomic depression
Hans Sennholz argued that most boom and busts that plagued the American economy, such as those in 1819–20, 1839–43, 1857–60, 1873–78, 1893–97, and 1920–21, were generated by government creating a boom through easy money and credit, which was soon followed by the inevitable bust.
The episode was labeled the "Great Depression" at the time, and it held that designation until the Great Depression of the 1930s.

Bank run

runrun on the bankbanking crisis
Banks began to fail as debtors defaulted on debt and depositors attempted to withdraw their deposits en masse, triggering multiple bank runs.
According to former U.S. Federal Reserve chairman Ben Bernanke, the Great Depression was caused by the Federal Reserve System, and much of the economic damage was caused directly by bank runs.

Federal Reserve Bank of New York

New York Federal ReserveNew YorkNew York Fed
This interpretation blames the Federal Reserve for inaction, especially the New York branch.
Economic historian Charles P. Kindleberger states that Strong was one of the few U.S. policymakers interested in the troubled financial affairs of Europe in the 1920s, and that had he not died in 1928, just a year before the Great Depression, he might have been able to maintain stability in the international financial system.

America's Great Depression

Depression
Two prominent theorists in the Austrian School on the Great Depression include Austrian economist Friedrich Hayek and American economist Murray Rothbard, who wrote America's Great Depression (1963).
America's Great Depression is a 1963 treatise on the 1930s Great Depression and its root causes, written by Austrian School economist and author Murray Rothbard.

Executive Order 6102

193361021933 executive order
On April 5, 1933, President Roosevelt signed Executive Order 6102 making the private ownership of gold certificates, coins and bullion illegal, reducing the pressure on Federal Reserve gold.
By the late 1920s, the Federal Reserve had almost hit the limit of allowable credit (in the form of Federal Reserve demand notes) that could be backed by the gold in its possession (see Great Depression).

Irving Fisher

FisherIrving FischerFisher, Irving
His subsequent theory of debt deflation as an explanation of the Great Depression, as well as his advocacy of full-reserve banking and alternative currencies, were largely ignored in favor of the work of John Maynard Keynes.

Aggregate demand

disaggregationKeynesian formulaaggregate
From the point of view of today's mainstream schools of economic thought, government should strive to keep the interconnected macroeconomic aggregates money supply and/or aggregate demand on a stable growth path.
John Maynard Keynes in The General Theory of Employment, Interest and Money argued during the Great Depression that the loss of output by the private sector as a result of a systemic shock (the Wall Street Crash of 1929) ought to be filled by government spending.

Stock market crash

crashcrashesmarket crash
The Great Depression started in the United States after a major fall in stock prices that began around September 4, 1929, and became worldwide news with the stock market crash of October 29, 1929, (known as Black Tuesday).
The crash was followed by the Great Depression, the worst economic crisis of modern times, which plagued the stock market and Wall Street throughout the 1930s.

Depression of 1920–21

Depression of 1920-21depressionrecession
Hans Sennholz argued that most boom and busts that plagued the American economy, such as those in 1819–20, 1839–43, 1857–60, 1873–78, 1893–97, and 1920–21, were generated by government creating a boom through easy money and credit, which was soon followed by the inevitable bust.
It was significantly shorter than the Great Depression (132 months).

Nazi Germany

Third ReichGermanGermany
Many of the countries in Europe and Latin America that were democracies saw them overthrown by some form of dictatorship or authoritarian rule, most famously in Germany in 1933.
In the midst of the Great Depression, the Nazis restored economic stability and ended mass unemployment using heavy military spending and a mixed economy.