What were the causes of the Great Depression?

Many historians point to the stock market crash of 1929 as the cause of the Great Depression.

While there is no consensus among economists today when trying to pinpoint the exact causes of the Great Depression, many historians believe that the 1929 stock market crash in the United States was the ultimate cause of the Depression. Others, however, claim that the stock market crash was just a symptom rather than one of the causes of the Great Depression, pointing instead to a series of growing problems prior to the stock market crash that caused a situation volatile.

The decisions made by the United States Federal Reserve Board played a role in the cause of the Great Depression.

Several factors combined to become the causes of the Great Depression. The United States Federal Reserve made a series of decisions that contracted the money supply, and at the same time, banks in the United States began to fail. Whether these factors caused the stock market to crash is a matter of debate, but eventually the stock market crashed, causing a ripple effect across the world. Free markets were affected and currency values ​​plummeted, and while interest rates also fell, most Americans felt pressured to the point of unwilling or unwilling to spend their money.

Ultimately, the causes of the Great Depression were myriad, not just one action or condition that led to the collapse. What could have been a less severe recession turned into a depression as consumer confidence plummeted; consumers simply didn’t want to spend their money, which led to a slowdown in the economy. Further compounded by bad faith on the part of the big banks that ended up collapsing catastrophically, markets suffered because people felt it would be wise to avoid investing and spending until the markets straightened out. This led to a reduction in demand.

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Other economists believe that the causes of the Great Depression can be attributed more to regulatory mistakes made by government bodies. When the banks began to fail, the Federal Reserve simply watched and waited to see what happened. Some economists argue that the Federal Reserve should have intervened to stop the big banks from failing, thereby preventing the widespread panic that led to a run on money. Others, however, believe that capitalism itself is doomed to failure when too much capital is gained by a single entity. This Marxist view essentially points the finger at the overaccumulation of wealth as a social issue that must be resolved, not simply an economic one.

These economic issues were not isolated to the United States. The Great Depression spread to major markets across the world, and Europe also felt the devastating effects of the depression. Historians and economists often point to World War II as the end of the Great Depression, as jobs were created in manufacturing to create armaments and other necessities for war.

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