THE GREAT DEPRESSION

The economic history of the United States - The Great Depression

The economic history of the United States - The Great Depression

Introduction

The Great Depression was an economic crisis that went global during the decade before World War II . Its duration depends on the countries analyzed, but most began around 1929 and lasted until late in the thirties or early forties. was the longest depression in time, more depth and affecting more countries than those suffered in the twentieth century . In the XXI century has been used as a paradigm of how far you can shrink the global economy. Depression originated in the United States, from the stock market crash of October 29 of 1929 (known as Black Tuesday but five days before the October 24 , as had occurred on Black Thursday ), and quickly spread to almost every country in the world.

Discussion

The Great Depression had a devastating effect on almost all countries, rich and poor. The national income , revenue, profits and prices fell, and international trade dropped between 50 and 66%. The unemployment in the United States increased to 25%, and in some countries reached 33%. Cities around the world were severely affected, especially those dependent on heavy industry and construction virtually halted in many areas. Agriculture and rural areas suffered from falling crop prices that reached about 60 percent. Faced with declining demand, areas dependent on primary sector industries, with few alternative sources of employment, were the hardest hit.

Countries began to recover in mid 1930, but its negative effects on many countries lasted until the beginning of World War II. Election as President Franklin Delano Roosevelt and the establishment of New Deal in 1932 marked the beginning of the end of the Great Depression in America (Chong-Yah & Hui-Ying, 2011). However, in Germany, the disappearance of external financing, in the early 1930's, and increasing economic difficulties, led to the emergence of National Socialism and the coming to power of Adolf Hitler .

The war had a profound and lasting economic consequences, in ending the international economic order, in place since the second half of the nineteenth century. Was a direct and indirect population decline of about 10% of Europe's population and 3.5% of existing capital (Walton & Rockoff, 2009). From the financial point of view, the war led to a massive public spending financed by debt in Europe both internal and external public that led to the multiplication by six of the existing debt, also made use of money creation which led to a strong inflationary pressure.

During the war, several nations involved in the conflict as the United States and Japan seized some international markets traditionally dominated by Europeans, who then focused their efforts on military production industry. In agriculture, foreign demand for food from the participating countries during the war grew, stimulating agricultural production of neutral countries, which after the war and return to the previous situation had watched as an oversupply of products forcing a drop in agricultural prices ...