The Great Depression

The Great Depression wasÐ'...

Ð''The Great Depression, like most other periods of severe unemployment, was produced by government mismanagement rather than by any inherent instability of the private economy.' Ð'- Milton Friedman. It was a worldwide economic downturn which started in 1929, yet its effects were not fully felt until late in 1930. It lasted through most of the 1930s although it ended at distinctive times in different countries. The Great Depression centred in North America and Europe but had damaging effects around the world. The most industrialized countries were affected the worst, countries such as Australia, Germany and the United States.

The Great Depression was an economic catastrophe that severely affected most nations of the world, and Australia, being one of the nations, was not immune. Australia depended primarily on products such as wool and wheat to be exported. A stop in spending meant a downfall in the demand for goods, hindering profit for companies whilst the demands for goods dropped further employees lost their jobs. Unemployment reached a record high of 29% in 1932. It is thought to have been one of the hardest-hit countries in the Western world along with Germany and the United States.

When the stock market collapsed on Wall Street (Tuesday, October 29, 1929), it sent financial markets worldwide into a tailspin with disastrous effects hitting hard on Germany. The German economy was vulnerable since it was built out of foreign capital, mostly loans from America; Germany was very dependent on foreign trade. However, the world market for exports dried up resulting in widespread unemployment trailing a record of 25% in Germany. The German government did not increase spending towards dealing with its growing crisis, due to anxiety that a high-spending policy would lead to a return of hyperinflation. Cities based on heavy industry were greatly affected by the Great Depression concluding a soar in unemployment and homelessness.

Ð''During the Depression, people were getting evicted, ten a day. We used

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