The Great Depression was an era of an immense economic downturn stirred in the United States in 1929.
It lasted for ten years, slowly spreading to almost all the countries in the world. It caused drastic declines in output, unemployment, and the stock market. The Gross Domestic Product fell by 30 percent in the US alone.
The more shocking fact is that there is no consensus among economists and historians regarding the exact causes of the Great Depression. However, few scholars agree with the following potential causes.
• The stock market crash of 1929: At that time the concept of stock investing was new and many people invested in it as an easy way to make money. This came with rising stock prices that ultimately led investors to pay huge loans for transactions.
• Banking panics: Between 1930 and 1932, there was an increased frequency of bank panics in the US, during which, large numbers of bank customers simultaneously attempted to withdraw their deposits to prevent bankruptcy.
• The gold standard: During the great depression, the US ran a trade surplus. They were exporting more cheap goods than accepting imported goods. This imbalance gave rise to significant foreign gold outflows to the United States, which in turn threatened to devalue the currencies of the countries that had depleted gold reserves.
Imagine the corona period extending for ten years amidst a war as dangerous as World War II. Nonetheless, The Great Depression is yet again an exquisite example of human resiliency.