KRF

REFLECTION
“ The Great Depression of 1930: Start of Macroeconomics ”
In the late 1930’s, there was an event that caused thousands and millions of people to become
worried for their future and gave them a horrible experience to witness a catastrophic global economic
downturn that lasted from 1929 to the late 1930s and is referred to as the Great Depression. Deflation,
mass unemployment, an abrupt decline in economic activity, and widespread poverty were its defining
features. The Great Depression, regarded as one of the most important economic crises in modern
history, had a tremendous impact on economies, cultures, and politics all around the world. It started in
the US and quickly expanded worldwide. In the years 1929–1933, there was an increase in the volume
of approximately 7,000 banks that failed, the stock market lost 80% of its value, the amount of products
and services produced in the US decreased by one-third, and the unemployment rate went up to 25%
of the labor force. The said event wasn’t just a downturn for the United States; it permeated throughout
the entire world’s economy. The United States experienced its effects worse than any other country. I
was curious about how this event occurred, and I discovered that, until now, the economist could not
point out the main real reason or come to a consensus. However, the scholars agree on some causes.
These causes caused the lives of all people to be in the line of nothingness.
One of the causes of the Great Depression was the crash of the stock market because many
people lost their money due to factors like the aftermath of World War I, overproduction, margin use,
and global buyer shortages. Businesses and investors both invested huge sums of money in the
market, and enormous sums of money were lost when it fell. Savings were lost by consumers when
businesses closed. This results in a bank panic that causes people to withdraw their money because
they fear that the institution will become insolvent. There are so many causes, but all of them will come
up with the same result, which is putting our economy in danger. Families experienced poverty, hunger,
and eviction on a never-before-seen scale, which increased political discontent and social unrest. Many
governments resorted to reductions in spending that worsened the economic downturn as a result of
their inability to respond effectively. This horrifying event was being solve through a number of factors,
including as increased government expenditure during World War II, the adoption of economic stimulus
plans, improvements in technology, and social welfare initiatives, contributed to the end of the Great
Depression. These initiatives eventually contributed to recovery and the end of the crisis by increasing
industrial production, generating jobs, and easing the financial burdens of the Depression era.
Economists learned to see the economy as a whole during the Great Depression, realizing that central
banks might avoid financial crises by controlling the flow of money and that taxing and fiscal authorities
may help those in need. This influenced macroeconomics and gave rise to fresh methods for
comprehending and resolving significant economic problems.

This event made me wonder if those people didn’t do things the way they did to help themselves.
Can we be in a place where we are right now? It’s so frightening to be in that situation, where you will
see the tiring faces of every person who was affected by it. Business that is being put down and seeing
those people who lost their jobs. The difficulties that they experienced were immeasurable, and their
high spirits motivated them to strive hard just to survive that kind of event. I also realized how lucky we
are to live in a place where we can solve problems more easily than before. I learned to be cautious in
my actions, especially when it involved money and making decisions. I also learned that because of
the Great Depression of 1930, it gave birth to the other branch of economics, which is macroeconomics,
which was created by an economist named John Maynard Keynes. He emphasized the importance of
unemployment and depression and their impact on the economy. The things that happened in the past
motivate me to learn the things that will help us look for the best actions that we must take to help our
economy develop. Some things in life must be forgotten. The Great Depression of 1930 is an event
that is not a good memory but gives us such an important lesson.