Great depression

Classified in Economy

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After the First World War, most of the belligerent countries had suffered serious economic losses. United States that the only exception, which was consolidated as a great world power.
The return to the old economy presented many difficulties. These include dependence of European governments in the U.S. Economy, increasing protectionism, the rise in inflation caused by rising money supply during the war, rising unemployment and the tendency to overproduction of the economic system .
In the Twenties, America was the best reflection of confidence in the future because it was the only country which was producing an economic expansion. For this reason, much of the population contracted loans and speculation on the Stock Exchange in New York until 24 October 1929, investors began selling their shares massively caused widespread panic and all wanted to sell to lose as little as possible . The feeling of fear clarified the stock market crash.
The stock market crash, coupled with an economy that accumulating problems and lack of adequate response by the monetary authorities in the U.S. Caused an economic crisis known as the Great Depression. The crisis continued throughout the thirties and subsequently extended a widespread economic pessimism, many businesses failed, unemployment increased, prices fell, there was a recording deflation due to non-state intervention, and exported to crisis worldwide.
The arrival of the crisis to Europe led to the decline in U.S. Purchases, causing a worsening of the situation. It also led to the adaptation in most European nations of protectionist measures, which led to a fall in prices in the U.S. And worldwide, respectively.
In the thirties, many governments were aware of the inadequacy of liberalism, they started to experiment with new economic policies based on increased domestic demand, greater production planning and social security systems that alleviate the effects of unemployment. In short, involving increased public spending and encouraged state intervention.
However, among the countries that broke away from the liberalism there were notable differences. Thus, there were extreme cases, such as fascism and communism, in which the state controlled economy in an authoritarian manner.
In the U.S., Roosevelt proposed the New Deal, which led to major projects which increased the demand and revived the industry and agriculture.

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