28 Sept 2016 | GS1 | The 2008 financial crisis has been called the greatest challenge to the world economy since the 1930 Great Depression. What was the Great Depression? What were its effects on the world, politically, socially, economically?

GS1 (World History)

The 2008 financial crisis has been called the greatest challenge to the world economy since the 1930 Great Depression. What was the Great Depression? What were its effects on the world, politically, socially, economically?

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The Great Depression of 1930 was a major event that changed the entire landscape of the world.
The major reasons were:
1. Excessive dependency of the European countries on Germany for debt repayments to US(Treaty of Versallies).So when Germany crashed, domino effect spread to all the European countries and the US.
2. Slowdown in the big economies like Russia.
3. Negligible govt. control on the economy
IMPACT:
POLITICAL:
1.Increased conflicts between the European countries- a leading cause of WWII
2.Mutual distrust crept in among nations
3.League of Nations broke down
ECONOMIC:
1. Increased govt. control over the economy(KEYNSIAN ECONOMICS)
2. Stoppage of US aid to Europe.
3. High inflation.
4. Stock markets crashed worldwide.

SOCIAL:
1.Mass migration to USA
2.High unemployment
3.Hunger and Poverty increased
4.Xenophobic tendencies increased among people(e.g.NAZISM in Germany)

Immediate consequences of the Great depression set the stage for WWII- the largest man-made destruction in the human history.
Nevertheless, corrective steps taken in the aftermath ensured that the Economic depression,should it occur again,could be better dealt with,as seen in ’08 crisis.

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