Questions about Great Depression
Short answers, pulled from the story.
When did the Great Depression start and end?
The Great Depression was a severe global economic downturn that ran from 1929 to 1939. The Wall Street crash of 1929 is often considered its beginning, and the outbreak of World War II in 1939 is widely seen as its end.
What caused the Great Depression?
The precise causes are still disputed. Explanations include the Wall Street crash, a 35% contraction of the money supply that Milton Friedman and Anna Schwartz called the Great Contraction, falling aggregate demand as described by John Maynard Keynes, Irving Fisher's debt-deflation spiral, the rigidity of the gold standard, and the 1930 Smoot-Hawley Tariff Act.
How bad was unemployment during the Great Depression?
Unemployment in the United States reached 25% by 1933. Germany's rate climbed to nearly 30% in 1932, Australia hit a record 29% in 1932, Canada reached 27% in 1933, while France peaked below 5%. In some countries unemployment rose as high as 33%.
How did the Great Depression spread around the world?
The gold standard was the primary transmission mechanism. Countries that lost gold but wanted to keep the standard had to let their money supply and prices fall, spreading deflation. Falling American trade, capital movement, and the Smoot-Hawley Tariff Act also pushed the downturn into other countries.
How did the Great Depression lead to the rise of Hitler?
Germany depended heavily on American loans, which stopped after the Wall Street crash, pushing unemployment to nearly 30% by 1932. The Nazi Party rose from the margins to take 18.3% of the vote in September 1930, and Hitler was appointed Chancellor in January 1933 before consolidating a single-party dictatorship.
How did the Smoot-Hawley Tariff Act affect the Great Depression?
The Smoot-Hawley Tariff Act, passed on the 17th of June 1930, raised the average rate on dutiable imports from 25.9% to 50% and triggered retaliatory tariffs abroad. American exports fell from about 5.2 billion dollars in 1929 to 1.7 billion in 1933, and two-thirds of economic historians surveyed in 1995 agreed it worsened the Depression.
How did the Great Depression end?
The common view among economic historians is that the Great Depression ended with World War II. War mobilization after 1939 ended unemployment, and in the United States the late-1941 mobilization moved about 10 million people out of the civilian labor force, bringing unemployment below 10%.