What caused the great depression in the United States?

Answer 1

Business cycles are a normal part of living in a world of inexact balances between supply and demand. What turns a usually mild and short recession or "ordinary" business cycle into a great depression is a subject of debate and concern. Scholars have not agreed on the exact causes and their relative importance. The search for causes is closely connected to the question of how to avoid a future depression, and so the political and policy viewpoints of scholars are mixed into the analysis of historic events eight decades ago. The even larger question is whether it was largely a failure on the part of free markets or largely a failure on the part of governments to prevent widespread bank failures and the resulting panics and reduction in the money supply. Those who believe in a large role for governments in the economy believe it was mostly a failure of the free markets and those who believe in free markets believe it was mostly a failure of government that exacerbated the problem. Current theories may be broadly classified into two or more main points of view. First, there is orthodox classical economics: monetarist, Keynesian, Austrian Economics and neoclassical economic theory, all which focus on the macroeconomic effects of money supply and the supply of gold which backed many currencies before the Great Depression, including production and consumption. Second, there are structural theories, including those of institutional economics, that point to underconsumption and over investment (economic bubble), malfeasance by bankers and industrialists or incompetence by government officials. Another theory revolves around the surplus of products and the fact that many Americans were not purchasing but saving. The only consensus viewpoint is that there was a large scale lack of confidence. Unfortunately, once panic and deflation set in, many people believed they could make more money by keeping clear of the markets as prices got lower and lower and a given amount of money bought ever more goods.

There are multiple reasons on what set off the first downturn in 1929, concerning the structural weaknesses and specific events that turned it into a major depression, and the way in which the downturn spread from country to country. In terms of the 1929 small downturn, historians emphasize structural factors like massive bank failures and the stock market crash, while economists (such as Peter Temin and Barry Eichengreen) point to Britain's decision to return to the Gold Standard at pre-World War I parities (US$4.86:£1).


US industrial production
[edit] Debt

Answer 2

the large melancholy became the direct effect of government. there became a fragile recession. yet government raised fees of activity, then raised taxes and on suited of that Smoot Hawley Tariff act that became the in simple terms precise straw that broke the camel's decrease back. in the time of 1930's Congress knew no longer something approximately economics and made concerns worst by using their financial regulations. very equivalent to they do right this moment.

Answer 3

well after world war 1 the US had economic problems and they got everything and then they went broke and people started to loose their jobs and stuff

Answer 4

money