The Great Depression

World War II was a pivotal turning point for America, transforming it and the rest of the world. America during this period grew stronger; it was also responsible for creating international institutions that contributed to the emergence of the new World Order. Other impacts include creating a Communist versus Democracy axis and finally creating the state of Israel.

The Great Depression

The Great Depression was the worst industrialized age recession in modern history. The Great depression was caused by a stock market crash, then a banking crash. The Great Depression completely weakened the world.

The Great Depression was the worst recession in modern world history. It started with the 1929 stock market crash; afterward, it was due to banking failures. It started in the United States banking system after World War I, and then spread throughout the entire world. The United States banking system fell due to banking panics (in the 1930s), which caused many banks to fail. In 1930, the Smoot-Hawley Tariff Act caused massive inflation and a GDP rise. GDP declined by 30% and unemployment rose to 20%.

If we are to compare the second-worst recession in America to the worst, the Great Recession, it wasn’t nearly as devastating as the Great Depression. The Great Recession saw unemployment rates at just below 10%, and the GDP decrease was just 4.3%. These are barely even comparable statistics. The Great Depression GDP decrease was ~6 times less. Unemployment, which is considered low at 4.5%, was just under 10% compared to the Great Depression’s ~20%.

The Great Depression was at least partially caused by risky monetary policy. From 1921 to 1929, the United States stock market had 4xed. This was important, and scary because prices in the United States had remained around the same. The Federal Reserve looked at this as speculation. Because the FR viewed the investing as speculation, they raised interest rates really high. They did this because they wanted people to invest less. This caused declining investment in construction and transportation due to the higher interest rates, which eventually blew up the economy.

The Great Depression was the worst recession in the industrial age, 1760-1840. It was the worst recession since the beginning of the Great Depression. The Great Depression had an unemployment rate of 20% and the GDP decreased by 30%, causing devastating moments. The Industrial Age was known for transforming economies from Agriculture to Industry, and it then collapsed during the Great Depression. The Great Depression ended during WW2.

Bibliography

Kershaw, Ian. To Hell and Back: Europe, 1914–1949. Narrated by John Curless. Unabridged audiobook. New York: Recorded Books, 2015.

Pells, Richard H., and Christina D. Romer. “Great Depression.” Encyclopaedia Britannica. Last updated October 24, 2025. https://www.britannica.com/event/Great-Depression

“The 1929 Review: Year of the Crash.” The Wall Street Journal. Accessed October 25, 2025. https://www.wsj.com/arts-culture/books/1929-review-year-of-the-crash-5143003b?mod=Searchresults&pos=1&page=1