DOUG STANWIENSBOISE HIGH SCHOOL

FOR THE IDAHO ACADEMIC DECATHLON

THE GREAT DEPRESSION: causes and effects

THE GREAT DEPRESSION: 1929-1939

Dorthea Lange’s Migrant Mother and Bread Line

THE GREAT DEPRESSION

There were numerous causes of the Great Depression

Unemployment was the most “visible” symptom

The Works Progress Administration (WPA) was an attempt to solve unemployment

Idaho received direct assistance from the WPA

HOW DO WE KNOW IF WE’RE IN AN ECONOMIC “DEPRESSION”?

CAUSES OF THE GD

EVERYTHING GOES DOWN!

Gross Domestic Product

Dow Jones Industrial Avg

Farm Prices (Deflation)

Ok, Unemployment Rate goes up!

So What Is a “Recession/Depression?”

Recession is defined as 2 consecutive quarters (6 months) of falling GDP

Some prefer an increase in the Unemployment rate of 1.5% or more

A Depression is a drop in GDP of over 10% orA two year recessionIn the 19th century, Americans called these

“economic panics”President Hoover didn’t like “panic” so he

used “depression”

So What Caused the Great Depression?

Check with your neighbor………

Did you say “The stock market crash”?

So What Caused the Great Depression?

Stock MarketCrash of ‘29-’33?

Bank Failures?

Int’l Debt Crisis?

Farm Crisis?

Lack of Industrial

Diversification?

MaldistributionOf Income?

Smoot-Hawley Tariff?

Asset Bubbles?

DecliningMoney Base?

Int’l Debt Crisis: Check out this mess!

American Banks

Britain/France

Germany

WWI Reparations

Repay WWI loans

Loans to Germany for reparations

Deposits at U.S. banks

Yikes! Does it matter WHAT caused the GD?

The causes determine the solutions/fixes

Post Depression economics has been organized based on 2 different theories about the causes:

Keynsian Theory focuses on under consumption

Monetarist Theory focuses on monetary contraction

We Know the Effect of the Great Depression

  1929 1933

Banks in operation 25,568 14,771 

Prime interest rate 5.03% 0.63%

Volume of stocks sold (NYSE) 1.1 B 0.65 B

Privately earned income $45.5B $23.9B

Personal and corporate savings $15.3B $2.3B

The Depression's impact on the economyHistorical Statistics of the United States, pp. 235, 263, 1001, and 1007.