THE GREAT DEPRESSION

October 29,1929: black day in economics

SUBMITTED TO SUBMITTED BY :

Dr. ANIL KANUNGO RISHI NIGAM 069

UTTAM DIWEDI 070
AISHWARYA RAJDEV 071
BHARATH GOKUL 072
DEEPANSHU MITTAL 073
WHAT WAS IT ??

Great Depression, worldwide economic downturn that began in 1929 and

lasted until about 1939. It was the longest and most severe depression ever
experienced by the industrialized Western world, sparking fundamental changes
in economic institutions, macroeconomic policy, and economic theory.

Originated in the United States, the Great Depression caused drastic declines in
output, severe unemployment, and acute deflation in almost every country of
the world.
MAJOR CAUSES BEHIND

Four factors which played roles of varying importance

 The Stock Market Crash Of 1929

 Banking Panics In The Early 1930
 The Gold Standard
 The Smoot-hawley Tariff Act (1930)
The Stock Market Crash Of 1929

 Roaring twenties
 Overpriced stocks
 Buying on margin
 Hike in interest rate
cooled investor’s
enthusiasm
 Gradual price declines in
October 1929, investors
lost confidence and the
stock market bubble
burst
Banking Panics

 Decline in money supply

 After crash people panicked
& started withdrawal of
money from bank
 Banks also invested in stocks
which lead to bank failure
 Hard cash lowered MONEY
MULTIPLIER leading to lower
money supply
 Failure of Federal Reserve
lead to contraction
The Gold Standard
 United States adhered to
an international gold
standard.
 Slowing economy combined
with the stock market
crash of 1929 and a
subsequent wave of bank
failures in 1930 and 1931
led to crippling levels of
deflation. Soon, the
frightened public began
hoarding gold.
 United States didn’t
abandon gold for another
two years like the rest,
deepening the pain of the
Great Depression.
The Smoot-Hawley
Tariff Act

 Raised import duties of

over 20,000 goods to
boost farm incomes
 Other countries
followed suit, both in
retaliation and in an
attempt to force a
correction of trade
imbalances.
 Resulted in decrease of
global trade by 65%
Effects On Economy Between 1929-1933

 Unemployment leaped 3% to
25%
 Fall in wage 42%
 90,000 business went
bankrupt
 11000 US banks failed
 Industrial Production failed by
45%
 Home building dropped by
80%
 Stock market 90% of it’s value
 US GDP fell by 104 to 55
billion
 CPI fell by 27%
Recovery - New Deal

 The New Deal is was the set of federal

programs policy Franklin
D. Roosevelt launched to end the Great
Depression

 It had four major goals and

achievements
-Economic Recovery
-Job Creation
-Investment in Public Works
-Civic Uplift

 It was the massive military

expenditures of World War II, not the
New Deal, that eventually pulled the
United States out of the Great
Depression
Conclusion
 Mass unemployment
 Worldwide effect of great depression
 Government/ Regime changes
 Lead to various fascist movement
 Slowdown of economy
 THANK YOU
In the end, we wanted to tell you an economics joke but there was not enough supply