Sample Essay on Economic Effects of the Great Depression
The Great Depression is a period that changes the lives of many people in the globe. It was a period that affected economies, social and political landscape of many people. It began in 1929 and culminated at the start of the Second World War in 1939. The Great Depression had devastating impacts on the rich and poor countries. It originated in the United States after a decline in the stock prices around 1929 and it became a global disaster when stock market crash or the Black Tuesday was reported. The economic impact the Great Depression were unbearable as many countries were affected negative or positively.
There are numerous factors that have been cited as the key causes of Great Depression. These include insufficient purchasing power between the middle class and the working class to bear with the high levels of production. There was also high falling of crops and commodity prices. In many nations, poor government policies and dependence of the market on borrowed money can be attributed as the key causes of the Great Depression. As a serious economic phenomenon, The Great Depression had widespread economic effects that hit many countries in the globe during this trying period and they include;
- Trade downfall– Trade collapse was not the only impact of the depression in American, but it also affect many other parts of the world. the international commerce was affect quickly and there was a sharp reduction in profits, personal incomes and tax revenues. The economic impact of the 1929 depression did not affect countries that exported raw material, but also industrialized nations. There was a sharp decrease in the world trade as each country tried to protect its own industries and products this was pushed by a raise in the tariffs on all imports.
- Employee suffering- Loss of jobs and scaled wages up to 20% of the work force led to increases cases of unemployment. There was an instant decrease in standard of living and these worsened the effects of depression.
- Collapse of the financial machinery- thousands of investors were affected by the Great Depression globally as they lost large sums of money. Factories, banks and stores were closed and this increased the number of unemployed citizens. About 659 sector banks were closed down in 1929, but they later rose in 1931 to 2294 after the end of the economic depression.
- Impact on agriculture- when most of the nations were hit by the Great Depression, many did not get any subsidies or loans and it was not easy to take part in mass production of agriculture products.
- Decrease in government spending- Governments globally reduced their spending and this meant reduced consumer demand. Infrastructures were no longer a priority and many projects came to standstill.
Human suffering became the order of the day and night in 1929 onwards until the climax of the Great Depression in the mid-1930s. the Depression and change in many policies that government many industries change the world economy greatly. Many countries went through a rehabilitation process that helped improve economy and income, revenue and availability of jobs eased things up.
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