The Great Depression was a severe worldwide economic depression that began in the United States in the 1930s. The global gross domestic product (GDP) decreased by an estimated 15% between 1929 and 1932. During the Great Recession, global GDP decreased by less than 1% from 2008 to 2009.
The Great Depression was the twentieth century's longest, deepest, and most widespread decline. It began in the United States, with the stock market crash on October 29, 1929 (known as Black Tuesday). The global gross domestic product (GDP) decreased by an estimated 15% between 1929 and 1932. During the Great Recession, global GDP decreased by less than 1% from 2008 to 2009.
The Great Depression had many causes, including:
- Stock market crash: The stock market crash of 1929 wiped out millions of dollars in wealth and caused a loss of confidence in the economy.
- Bank failures: The failure of thousands of banks led to a loss of faith in the banking system and made it difficult for businesses to borrow money.
- High interest rates: High interest rates made it difficult for businesses to borrow money and invest.
- Trade restrictions: Trade restrictions between countries made it difficult for businesses to sell their goods and services.
- Drought: A drought in the United States in the 1930s caused widespread crop failures and led to a decline in farm income.
The Great Depression had many effects, including:
- Unemployment: The unemployment rate in the United States reached nearly 25% during the Great Depression. Millions of people lost their jobs and were forced to live in poverty.
- Homelessness: Millions of people lost their homes and were forced to live on the streets or in shantytowns.
- Hunger: Millions of people were hungry during the Great Depression. Soup kitchens and breadlines were set up to feed the poor.
- Disease: The Great Depression led to an increase in disease, as people could not afford to see doctors or buy medicine.
- Social unrest: The Great Depression led to social unrest, as people became frustrated with the government and the economy. There were riots and protests in many cities.
The Great Depression ended in the late 1930s, as the economy began to recover. However, its effects were long-lasting, and it took many years for the world economy to fully recover.