Great Depression

A term for the economic depression that began in 1929 with the crash of the stock market. It was characterized by high levels of unemployment, bank failures and eventually a second World War. During the Great Depression, the Dow Jones Industrial Average fell 90% from its peak in 1929.

There are varying explanations for the cause of the Great Depression. They include the Austrian explanation of a crackup boom in the 1920s due to easy money policies by the Federal Reserve, some experts’ belief that the Great Depression was a normal recession in the business cycle that was worsened by the Smoot-Hawley Act and other intervention, and others believe that the Great Depression was caused by a tightening monetary policy that did not ease when the recession worsened  (a famous academic that holds belief is Ben Bernanke, chairman of the Federal Reserve)

Before the Great Depression that began in 1929, a recession that started in 1893 was known as the Great Depression.

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