Great Depression

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Definition of 'Great Depression'

The Great Depression was a severe worldwide economic depression that took place mostly during the 1930s, beginning in the United States. The timing of the Great Depression varied across nations; in most countries it started in 1929 and lasted until the late 1930s. It was the longest, deepest, and most widespread depression of the 20th century.

From a financial perspective, the Great Depression was characterized by:

A sharp decline in stock prices and other asset values.

A rise in unemployment and bankruptcies.

A decline in consumer spending and economic activity.

A tightening of credit and a rise in interest rates.

A decrease in government revenue and an increase in government debt.

The financial consequences of the Great Depression were far-reaching and had a significant impact on individuals, businesses, and governments around the world. The severity of the impact depended on a number of factors, including the underlying causes of the downturn, the policies that were implemented to respond to it, and the overall global economic conditions.

The Great Depression had a number of long-term effects on the global economy. These included:

The rise of Keynesian economics, which emphasizes the role of government intervention in managing the economy.
The development of new financial regulations, such as the Glass-Steagall Act, which was designed to prevent another banking crisis.
The creation of new international organizations, such as the International Monetary Fund (IMF) and the World Bank, which were designed to promote global economic stability.
The Great Depression was a major turning point in world history. It had a profound impact on the global economy and on the way that governments and businesses manage their finances. The lessons of the Great Depression are still relevant today, and they can help us to avoid a similar economic catastrophe in the future.

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