In particular, they point to the decision to inflate the US economy to try and help the UK remain on the Gold standard at a rate which was too high.They argue after this unsustainable credit boom a recession became inevitable.Long queues of people wanting to withdraw their savings was a common sight.
In particular, they point to the decision to inflate the US economy to try and help the UK remain on the Gold standard at a rate which was too high.They argue after this unsustainable credit boom a recession became inevitable.Tags: Homework MakerThe Meaning Of Life EssayFemale Genital Mutilation EssaysPersuasion Research PaperDissertation BindenProgramming Homework HelpResearch Paper FindingsFreshman Year Vs Senior Year EssayThesis Of Federalist 51Grade 10 Defining Moment Essay
This global recession was exacerbated by imposing new tariffs such as Smoot-Hawley which restricted trade further.
Monetarists highlight the importance of a fall in the money supply.
Share prices would fall even more in 1932 as the depression deepened.
By 1932, The stock market fell 89% from its September 1929 peak.
The Great Depression was a period of unprecedented decline in economic activity.
It is generally agreed to have occurred between 19.It was at a level not seen since the nineteenth century.In the first 10 months of 1930 alone, 744 US banks went bankrupt and savers lost their savings.They point out that between 19, the Federal Reserve allowed the money supply (Measured by M2) to fall by a third.In particular, Monetarists such as Friedman criticise the decisions of the Fed not to save banks going bankrupt.They say that because the money supply fell so much an ordinary recession turned into a major deflationary depression.The Austrian school of Economists such as Hayek and Ludwig Von Mises place much of the blame on an unsustainable credit boom in the 1920s.The Austrian school doesn't accept the Friedman analysis that falling money supply was the main problem.They argue it was the loss of confidence in the banking system which caused the most damage.Therefore, the unemployed dramatically reduced their spending.America had lent substantial amounts to Europe and UK, to help rebuild after first world war.