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Current Economy and The Great Depresson - Research Paper Example
Finance & Accounting
Pages 3 (753 words)
Current Economy and the Great Depression Name Institution The Great Depression of 1929 was one of the worst economic periods in the world. The US had been experiencing prosperity and optimism for a decade, which propagated lending by individuals with the purpose of investing in the stock market…
As a result, half of the financial institutions in the US became insolvent. In summary, the US manufacturing production was down 54% in 1932 as compared to 1929, while the unemployment level were up by more than 25%, or more than 12 million people. The economic downturn soon spread to the rest of the world due to the relationship of the US with the Europe’s economy in the post World War 1 period. The major reason for the occurrence of the great depression was the deregulation in the banking industry especially in the US Securities and Exchange Commission. Today, the world is facing an economic crisis, which has been persistent since the great recession of 2009. The financial crisis is a result of an extensive credit-fueled bubble that preceded the economic boom of the late 1900s and early twenty first century (Eichnegreen & O’Rourke). The two economic periods have some similarities between them. In essence, the Great Depression and the current economic status occurred after periods of excellent economic growth, productivity, investment, and booms. The Great Depression was a result of extraordinary growth of the economy in the US resulting to the over-optimism of growth in the stock market. ...