Great Depression

Great Depression refers to a major worldwide economic downturn that began in 1929 and continued through much of the 1930s. It was one of the most serious periods of economic hardship in modern history. During this time, many countries faced falling wages, reduced trade, and widespread unemployment. The Great Depression changed how governments and economists understood financial systems and how to respond to economic problems.

The Great Depression is often linked to the events of 1929, especially the stock market crash in the United States. When stock prices fell sharply, many companies lost value, and people who owned shares lost their savings. Banks that had invested in risky loans or stock holdings struggled to survive. As bank failures spread, people became unsure about the safety of their money, and many withdrew savings, making financial conditions worse.

Unemployment rose sharply during the Great Depression. Many factories, mines, and farms could not sell enough goods to stay open, leading businesses to reduce the number of workers or close completely. Families often had less money to spend, and this reduced buying power caused further declines in production. In rural areas, droughts and poor harvests made conditions even more difficult, especially in regions like the American Dust Bowl.

Governments responded to the crisis in different ways. Some expanded public work programs to create jobs, such as building roads, bridges, and other infrastructure. Others changed banking rules to prevent future collapses. In the United States, these efforts were part of a set of policies known as the New Deal. Around the world, countries updated economic policies to help stabilize trade, employment, and currency values.

The Great Depression also changed how people understood global connections. Because many countries depended on one another for trade, economic problems in one place spread quickly. International cooperation later grew stronger as leaders recognized the need for coordinated financial policies. The experience shaped ideas about unemployment, social support, and government responsibility in economic matters.

By the late 1930s, many countries began to recover as trade increased and industries expanded again. Although the Great Depression eventually ended, it left long-lasting effects on economic policy, financial regulation, and the role of governments in supporting national economies. Historians continue to study this period to understand what caused the downturn and how societies responded to widespread economic pressure.