<aside> <img src="/icons/light-bulb_gray.svg" alt="/icons/light-bulb_gray.svg" width="40px" /> In this lesson, you will…
Big Question: What were the causes and impacts of the global Great Depression?
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As the First World War and the Paris Peace Conference came to a close, a new crisis gripped the world in the Great Depression.
The Great Depression was the most severe worldwide economic downturn in the 20th century, beginning in the United States in 1929 and spreading globally.
Its effects included:
The causes of the Great Depression were multifaceted and interlinked, involving both structural weaknesses in the global economy and specific triggering events:
The Stock Market Crash of 1929 in the United States eroded wealth and consumer confidence.
Major banks failed as they ran out of cash. As businesses also went bankrupt, mass layoffs left many unemployed.****
High Tariffs and Protectionism: The introduction of high tariffs, most notably the Smoot-Hawley Tariff in the United States, sparked a decline in global trade.
Debt and Reparations: European countries struggled with high levels of debt from World War I and were being pressured to pay off the reparations, which strained the financial system.
The Depression's impact varied across countries but was universally devastating.
US: Unemployment rates reached nearly 25%, with thousands of banks and businesses closing.
Europe: Germany, already weakened by war reparations, saw skyrocketing unemployment and political unrest. The United Kingdom and France also experienced significant economic downturns.
The New Deal, introduced by President Franklin D. Roosevelt, aimed to provide immediate economic relief, recovery, and reforms to prevent future depressions.
In Germany, the economic crisis contributed to the rise of Adolf Hitler and the Nazi Party, who promised to restore economic stability.
In Britain and France, the government turned inward and isolated their imperial economies.