HIS
Mohamed Nasher
Professor Bennet
5/4/2021
The Causescusses of the great depression
The cusses of the great depression
The great depression is the economic downward that affected the world after the disruption of the economies following World War I (1914-1918) and recovery of the 1920s, when after the war, where manymost economic activities were destroyed, making it hard for the countries to survive guards economic conditions. The Ggreat Ddepression began on the year 1929 ad ended in the year 1939, which lasted for almost ten years, making it hard for nations worldwide to survive the harsh economic condition that made it hard to sustain the basic needs of its citizens. This paper will address the causes of the great depression and discuss its impact and attempted solutions based on the comparison between the causes in different nations, especially the United States and Japan. [For a complete thesis statement here, add another sentence where you say very briefly how the American and Japanese experiences compared and contrasted.
The Ggreat Ddepression is among the worst economic challenges to have faced the world and lasted for a more extended period. Countries found it hard to control because they had just suffered from war and conflicts, which destroyed infrastructural support and institutions responsible for regulating economic indicators such as inflation rate and the interest rate. The level of interest rate influences the country's economic development, and it is the responsibility of the reserve bank or central bank to regulate the rate of interest rate so that the money supply in the economy can be maintained at an optimum level hence controlling the inflation rate.
The general causes of the great depression
Overproduction of consumer goods participated in the cause of the tremendous depression challenge. Most industries concentrated on the production of consumer goods as a way of increasing productivity. They left behind another sector, which is essential in supporting economic development. As a result, even the supply of consumer goods became expensive because of the high cost of production and distributional channels available to the industries. [What is your source for this information? You need to give source information in a footnote (or parentheses)]
ManyMost banks closed because of their weaknesses to regulate the money market, which affected many countries' economic activities. Failure of the banks to maintain the interest ratetarte at the equilibrium point affected their operations, leading to the collapse of the banking sector within the economy. The economy cannot survive where the banking sector is not functioning correctly because the saving and investment function within the economy depends on the banking sector. Therefore, the collapse of the banking sector negatively influenced the money supply in the economy, which increased the interest rate and inflation rate hence discouraging the investment, which reduced the overall output within the economy. [Deflation was a more serious problem during the Depression than inflation. Are you sure you don’t mean deflation?]
Lack of credit from financial institutions within the economy also contributed to the long-term effect of the great depression on the economy. The overall economy was ailingAisling, and the financial sector was also negatively influenced, which left no chance of economic revival through financial credit. Lack of financial credits led to the countries struggling to sustain the basic needs without proper fiscal or monetary policy to revive the economy. When that economy is in a financial crisis, the only hope is on financial credit, but that was not the case because the financial institutions were negatively influenced and were not functioning correctly. [again, what is your source?]
According to economic history, bankruptcies and high level of debts contributed to the great depression that happened for a more extended period. Most firms surfed from bankruptcy and were unable to facilitate their operational activities, which reduced the overall GDP of the economy. The 1929 Stock Market Crash also contributed to the great depression because the stock market is where public companies trade and get assistance from potential stakeholders to help companies in times of financial crisis to increase their investment decisions. The failure of the stock market exchange contributed to an increase in the inflation [I THINK DEFLATION, not inflation] rate that resulted in the diverse economic effects during the great depression.
In the United States of America, the effect of the Ggreat Ddepression was high between the year 1929 and 1933. From the history of the USA, there was an expansion of the stock market in 1929 where the stock market price increased, and it changed the investment decision of many investors where it was seen as the easiest way of making money is through the investment in the stock market (Diner, Yossel, & Enel, 2018). The attractiveness of the stock market forced ordinary people to use all their savings and loans to buy stock with the anticipation of higher returns. Individuals within the economy were forced to take loans and invest in the stock market because it was performing well to get the profit and pay the loans back.
By October 1929, the prices for the stock market started declining, and most of the investors were worried and were forced to rush and liquidate their shares because the stock market was currently the only investment they had. The liquidation of the shares affected the company’s financial performance negatively because it was an abrupt ad. There were no alternative means companies could get alternative funding to continue sustaining their economic activities and daily operations. [What’s your source?]
The resultant effect of the stock market shock was the loss of confidence in the economy because investors could not trust the goods market and the money market, which are the core components of economic development. Due to the reduction in economic activities, the consumption rate and the investment level reduced drastically, which reduced the overall output of various manufacturing firms and those in service delivery. When the production ratestory is low, it becomes difficult for it to sustain a high operational cost, resulting in increases in the unemployment rate, which was one of the characteristics of the economy during the great depression. [Your source?]
[YOU SHOULD REPLACE THIS WHOLE PARAGRAPH WITH A DESCRIPTION OF THE UNEMPLOYMENT PROBLEM IN THE US. THERE ARE STATISTICS in the PDF reading on the Great Depression, and in the course textbook]Banking panics and monetary contractions in the USA in 1930 contributed to the great depression experienced in the economy. An extended banking panic forces customer to withdraw all their savings through cash with fear of losing money due to the probability of the banks collapsing. With customer worries, the banks cannot hold adequate funds to sustain the economy because the banks act as money supply regulators within the economy. Massive withdrawal of money from the banks made it difficult for the bank to regulate the interest rate and promote investment within the economy, resulting in the collapse of many banks, leaving the economy vulnerable that culminated in a tremendous long-term depression was experienced.
The gold standard and trade between the USA and other countries also contributed to the great economic depression. During the tie great depression, the Americans were buying fewer imported goods. Still, their export was cheaper, which resulted in the market surplus. As a result of the differences, it threatened the country's currency, influencing the economic decisions on the restricted trade to safeguard the federal money.
ADD at least one paragraph and maybe two about how after 1933 President Roosevelt and the Democratic Party tried to fix the Depression: public works projects, government spending, etc. Say how that worked. Did it end the Depression? Or just improve things some? The most important end to the Depression in the US was the outbreak of WWII and the effort to build up the military.
The great depression in Japan was influenced by poor economic investment decisions and overreliance on the manufacturing and production of weapons. During the war, countries depended on firearms to start to fight each other, and the countries shifted their resources in the manufacture of more weapons so that they can be powerful. Overreliance on weapon production left other sectors, such as producing consumable goods and infrastructure, which left the economy vulnerable. The Japanese government was hit hard by the economic depression compared to the USA because it lacked natural resources that can be used as a source of short term rescue to the economy, which was ailing at that point. The country had no iron, oil, and other resources that could support the military forces in producing the required weapons to be used during the war. Therefore, the manufacturing of weapons for warfare, a primary focus, contributed to the persistent nature of the great depression because the economy had shifted its investment plan and concentrated on manufacturing weapons and machines instead of consumer goods to help the recovering economy from the distraction of the war. [Good. But what are your sources?]
Therefore, Japan, the same as the USA, suffered a tremendous economic depression because of the collapse of the banking sector to regulate the economy (Ryska, 2017). The country had fewno natural resources to help in the manufacturing of the warfare. Still, instead of help from financial institutions such as banks, they are all not functioning correctly, resulting in the bankruptcy of many firms. The collapse of industries increased the level of unemployment and reduced the country's overall GDP.
Add a paragraph about how the Japanese decided to get resources and customers by conquering China. This is very important! Invaded Manchuria in 1931 and the rest of China in 1937. Did the Depression end in Japan? How? There is reading about this in the textbook and in the assigned PDF file.
In conclusion, the great depression is among the worst economic condition to have affected world history. Its leading cause revolves around flawed institutional and production process within the economy where the relevant institutions such as banks were failing and were unable to revive the world's ailing economy. The 1929 Stock Market Crash also contributed to the great depression because the stock market is where public companies trade and get assistance from potential stakeholders to help companies in times of financial crisis to increase their investment decisions. Lack of financial credits led to the countries struggling to sustain the basic needs without proper fiscal or monetary policy to revive the economy. When that economy is in a financial crisis, the only hope is on financial credit, but that was not the case because the financial institutions were negatively influenced and were not functioning correctly. When you’re done, update your conclusions with something about what Roosevelt did in the US and how the Japanese chose war.
ADD at the end: Bibliography listing complete information about all the sources you used for this paper
The main things you need to fix are:
1. Give complete information about your sources throughout the paper. What author did you get the information from, what page. Put this information in frequent footnotes. Without that, your score will be very low!
2. At the end of the paper, give a complete list of your source: author, title, date of publication, website information if its from a website.
3. Add more information about unemployment in the US
4. Add more information about how the United States tried to FIX the Depression after 1933, and how well that worked. Don’t ignore the fact that World War II finally ended the Depression in the US.
5. Add more information about unemployment in Japan. Was it as bad as in the US?
6. Add more information about how the Japanese tried to fix their Depression. Don’t ignore how they resorted to military invasion of China. Did that solve the Depression in Japan?