Are We Moving Towards Great Depression Of 1930s – Free PDF Download

• The year 2020 could see the worst global economic fallout since the Great Depression in the 1930s-
• With over 170 countries likely to experience negative per capita income growth due to the raging  coronavirus pandemic.

WHAT WAS THE GREAT DEPRESSION?

• It was a major economic crisis that began in the United States in 1929, and went to have a worldwide impact until 1939.
• It began on October 24, 1929, a day that is referred to as “Black Thursday”, when a monumental crash occurred at the  New York Stock Exchange as stock prices fell by 25%.

• While the Wall Street crash was triggered by minor events,
• The extent of the decline was due to more deep-rooted factors such as-
• Fall in aggregate demand, Misplaced monetary policies, and
• An unintended rise in inventory levels.
• In the United States, prices and real output fell
• Industrial production fell by 47%.
• The wholesale price index by 33%.
• Real GDP by 30%.
• The havoc caused in the US spread to other countries mainly due to the gold standard.
• In almost every country of the world, there were massive job losses, deflation, and a drastic  contraction in output.

UNEMPLOYMENT

• Unemployment in the US increased from 2% to 25% between 1929 and 1933.
• In the UK, it rose from 2% to 15.4% between 1929 and 1932.
• The Depression caused extreme human suffering, and many political upheavals took place around the world.
• In Europe, economic stagnation that the Depression caused is believed to be the principal reason behind the rise of  fascism, and consequently the Second World War.

GREAT DEPRESSION IMPACT INDIA

• There was a drastic fall in agricultural prices.
• Credit contraction occurred as colonial policymakers refused to devalue the rupee.
• It has an important impact on India’s freedom struggle.
• Soon after Mahatma Gandhi had launched the Civil Disobedience movement, effects of the Depression became visible around the  harvest season in 1930.
• There were “No Rent” campaigns in many parts of the country.
• Radical Kisan Sabhas were started in Bihar and eastern UP.
• This provided support to the Congress, whose reach was yet to extend into rural India.
• Landslide victory in the 1936-37 provincial elections.
• Abandoning the gold standard helped the economy grow.

CURRENT SCENARIO

CONCLUSION

• Things are very different from what was it in 1930s.
• Now we have robust monetary system in place.
• If we are able to tackle the pandemic, the economy is expected to recover sharply.

Latest Burning Issues | Free PDF

Sharing is caring!