What were the causes of great depression?
Although there is no consensus between economists today, trying to determine the exact causes of great depression, many historians feel that the accident on the stock market in 1929 in the United States was the final cause of depression. Others, however, claim that the accident in the stock market was more of a symptom than one of the causes of a great depression, instead of the problems with increasing problems that preceded the accident in the stock market that caused volatile situation.
Several factors have come together to become the causes of great depression. The Federal Reserve of the United States has made a number of decisions that closed money supply, and at the same time banks in the US began to fail. Whether these factors have caused the stock market accidents to be in debate, but eventually hit the stock market, causing the ripple around the world. Free markets and currency values have been influenced, and while interest rates also dropped, most Americans felt quite printing that they would either not or could not spend their money.
In the end, the causes of great depression were numerous, not just one action or a condition that led to collapse. What could be a less serious recession has changed to depression when consumer trust has failed; Consumers simply did not want to spend their money, which led to a slowed economy. Soon, which were further composed in the wrong way by large banks that ended up disastrous, the markets suffered because people felt wise to avoid investments and expenditures as long as the markets were remedied. This led to reduced demand.
Other economists believe that the causes of the great economic crisis can be traced more to the regulatory errors that have occurred by the control authorities. When the banks began to fail, the federal reserve system simply followed and waited for what had happened. Some economists claim that Federal Reserve should enter to prevent larger banks from failing to prevent the widespread panic thatled to the run of money. Others, however, believe that capitalism itself is designed to fail when too much capital gains any single entity. Basically, this Marxist view points to the finger of excessive accumulation of wealth as a social problem, which must be solved rather than economic.
These economic issues were not isolated in the United States. Great depression has spread in the main markets around the world, and Europe also felt the destructive effects of depression. Historians and economists often point to the Second World War as the end of a great depression, as jobs were created in production to create equipment and other war needs.