ANUSHKA SABHARWAL (B.A. (Hons.

) Psychology)

TITLE: GREAT DEPRESSION AND ITS ECONIOMIC IMPACTS

INTRODUCTION

The 1920s often called the “Golden 20s” because the markets were booming but there were a
series of structural issues. Only a few years after the 1st World War the global economy was
still suffering from the consequences of the brutal war. The market crash of 1929 came
unexpected and shocked the world. It is considered a unique, , event occurring only once-in–
a-lifetime.

This project covers the period before, during and after the Great Crash on Wall Street.

OBJECTUVE

To study the great depression and its impact on hyperinflation, supply, demand etc.

RESEARCH METHODOLGY

A descriptive study was considered in order to meet the goals of the research project, with the
key characteristic of collecting data, describing and organising the information through
secondary research such as reports, journal articles, books etc.

SUMMARY

The market crash of 1929 is considered a unique, five sigma event, occurring only once-in–a-
lifetime.

The 1920s often called the “Golden 20s” had a series of structural issues: only a few years after
the 1st World War the global economy was still suffering from the consequences of the brutal
war. In Europe Germany suffered from hyperinflation, an instable political system (the Weimar
Republic) and huge reparation payments as a result of the Versailles Treaty. Keynes who was
part of the negotiating team had warned of the heavy burden of the reparation duty on the
German economy. France was in a transition from an agricultural to an industrialised nation.
Great Britain also went through a structural change as many booming sectors (textiles, mining)
started to falter.

There was a significant split between the prosperous and inventive South East (London and its
environs) and the impoverished north. With the introduction of a command economy, Russia's
new identity as the Soviet Union separated from the global economy. China, which had
likewise transitioned from empire to republic, was catching up to the West. By the end of the
nineteenth century, the United States had surpassed the British Empire as the world's most
powerful economy. The United States entered the war late and was unaffected by First World
War hostilities on their soil.

As a result of several European countries' massive war reparation payments and debt, many
European countries (Germany, Italy, Spain, and others) focused solely on their own interests,
ignoring the global context of their actions, and turning to fascism and nationalism. Both
Germany and France experienced political instability and a succession of governments in a
short period of time.

The stock markets recovered a little after the 1929 crisis before entering a four-year bear
market. The US economy entered a long recession as a result of the US central bank's
purposeful inaction (the Great Depression). The stock markets in the United States took 25
years to recover to pre-crash index levels (1929-1954).

Through this project I developed a deeper understanding of the socio-economic factors and
conditions that prevailed at the time of great depression. I have shown that the 1920s were a
decade of economic prosperity and development, interrupted by three short recessions in 1920-
21, 1923-24 and 1926-27. The stock market rally started in 1924 and lasted for 5 years until
1929 ending in the GC with Black Thursday and Black Tuesday. While there is still
disagreement about the causes and reasons for the great crash of 1929, I have shown in the
project the facts that contributed to the Crash on Wall Street and the ensuing economic collapse.
REFERENCES

Pells, R. H. (2021, October 11). Great Depression. Retrieved from www.britannica.com:

https://www.britannica.com/event/Great-Depression
Khan Academy. (2021). The Great Depression. Retrieved from ww.khanacademy.org:
https://www.khanacademy.org/humanities/us-history/rise-to-world-power/great-
depression/a/the-great-depression
NCERT. (2018). India and the contemporary world 1. NCERT.