¶ … Great Depression of the 1930s and the current status of the United States.
Great depression of the 1930's and current economic status of the U.S.
The research paper compares and contrasts the great depression of the 1930's and the current economic status of the United State of America.
It first of all makes a general overview of each of these two different periods and then focuses on certain specific aspects during these different times which include the causes to the economic recessions witnessed, impacts of the economic recessions and the solutions that were introduced so as to bring the economy to a recovery level or phase and lastly the research paper will conclude the topic.
Great Depression of 1930's
When talking about any topic regarding the American history it would be hard not to mention the 1930's great depression, this is evident by the fact that various authors in those times and even in the present times still devoted their literature works to study and research about this topic. Referred by many studies and researches that have ever been conducted as one of the world's worst economic depression, that can be used as a case study to describe how low world economy can fall.
It's the longest recorded economy depression in the world both in the 20th century and 21st century, the United States of America was the first casualty of the recession when in September 4th of the year 1929, its' stock prices fell to an all time low. Research showed that later on, the depression spread wide across the globe lasting for almost a decade and before the start of the World War II in 1945.
The impacts of the great depression were enormous as it didn't even spare any developed, developing or any under developed country during that time, but its important to note that countries whose economies mainly relied on heavy industries such as mining, crop production and logging were the worst affected by the economic depression unlike those countries who didn't.
In the mid-1930's some countries' economies witnessed the start of economic recovery and end to recession while some economies dragged on in the great depression till beginning of the second World War when they witnessed some economic indictors which signaled the start of economic recovery (Mitchell, pp 462).
Current economic status of the U.S.
The United States of America economy is generally regarded by various renowned economists and authors as the number one World economy, this fact is evident by statistics that recently were released by the World Bank which showed that in the year 2009 the country's gross domestic product was more than 14 trillion USD, about quarter of the total world GDP.
The U.S. economy experienced robust growth after the great depression to a level where it became the largest manufacturer in the world, with almost 20% of the total World's manufacturing output coming out of the U.S. The New York Stock Exchange grew to become the largest stock exchange in the World; further more the country also boasts of having the largest deposits and reserves in terms of gold in the entire world at its' New York Federal Reserve Bank (Embrechts, pp 1-33).
Despite of its' strength and financial background the United States of America's economy witnessed between the period of 2007 to 2010, what is termed by Embrechts (pp 1-33) as the worst economic recession after the great depression of 1930's. The financial melt down which started in the year 2007 up-to-date, has been largely attributed to the banking sector of the country and it exposed the 21st century Americans to nearly what was experienced in the 1930's great depression.
Causes
According to Gusmorino Web page, the great depression of 1930's was largely caused by stock market meltdown. Gusmorino studies show that there was high speculation in the stock market in the late 1920's which kept the market at high virtual levels than the actual levels, that lead to the market collapse, while studies conducted by Taylor, (pp 21-54), indicated that the current economic status in the U.S. was largely attributed to the housing industry which had experienced tremendous growth between the periods of 2005 to 2006 that encouraged potential home buyers to take high mortgages with a common belief that they would be able to pay back the loans at lower interest rates. But coming to the year 2007 the industry performed extremely poorly, interest on mortgage loans went up while housing prices declined leading to a sharp fall in stocks and shares tied to the housing industry. The impact was felt widely across the economy but mostly in financial institutions across the country, (http://www.gusmorino.com/pag3/greatdepression/index.html).
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