How did the Great Depression become a Global Event?
How did the Great Depression become a Global Event? The Great Depression led to an economic crisis in the US, which became a global event. At the onset of the great depression, the demand for durable and investment goods declined. Consequently, there was a slowdown in business activity. The declined business activity due to the Great Depression led to a shortage of investment, bringing down the global demand for goods and services.
The Great Depression caused a decrease in the assets under the custody of many investors, limiting their willingness and ability to buy. Therefore, the crash of stock market prices negatively impacted the investment industry since investors had no confidence in their devalued asset prices (Bertocco 382, paragraph 1). Due to the limitation of the investors, the international market faced a great crisis. The cost of consumer goods also fell significantly, drifting away the interest of investors in the industry. The investors could be risking a loss of their investments if they chose to channel their funding into any of the industries facing a shortage of demand. At large, the Great Depression became a global event by limiting investors’ ability to invest in the international market.
During the Great Depression, the demand in the international market fell significantly, causing remarkably high levels of unemployment worldwide. Firms could not secure loans from local banks following the great depression, causing them significant financial constraints (Benmelech et al. 541, paragraph 7). As a result, industries had to lay off employees to leverage revenue during challenging economic times. The loss of job opportunities was widespread across many industries worldwide due to decreased demand for goods in the international market. The consumer industry felt a significant impact due to its vast loss of demand in the international market. Therefore, many workers and potential workers globally had to survive without any employment due to the decline in the demand for their services during the great depression.
When did the Great Depression become global?
The Great Depression led to a decline in the demand for products from primary sector industries, causing a global depression in agricultural sectors. Farming communes worldwide suffered as the demand for consumer goods fell significantly due to the instability in the global market (Krstic et al. 9404, Paragraph 2). As a result of a few job options and plummeting demand, people from places that relied upon primary sector industries went through unsaid suffering. Consequently, people from places that mainly depended on crop farming and animal rearing were among the most negatively affected. Therefore, the Great Depression brought a crisis in the primary sectors worldwide.
How did the Great Depression affect society?
In summary, the Great Depression became a global event by slowing down business activity, causing a decrease in demand for goods and services in the international market. Investors were wary of probable losses in the devalued assets, slowing down their investment efforts. On the other hand, the loss of demand in the international market led to a significant loss of jobs globally. Besides, people from primary sector industries like farming faced the depression due to the loss of demand for their products in the global market.
Benmelech, Efraim, Carola Frydman, and Dimitris Papanikolaou. “Financial frictions and employment during the great depression.” Journal of Financial Economics 133.3 (2019): 541-563. Available at: https://www.sciencedirect.com/science/article/abs/pii/S0304405X19300388
Bertocco, Giancarlo, and Andrea Kalajzić. “Great Recession and Macroeconomic Theory: A Useless Crisis?.” Review of Political Economy 31.3 (2019): 382-406. Available at: https://www.tandfonline.com/doi/full/10.1080/09538259.2020.1714202?casa_token=hXJmMtMhA7AAAAAA%3At7MQcb6XyC7nvzj_F5gzzSgExSOz5rncRnIxquuP4aay7yPHxIJwWXDgIUTjBXvsZdW4ShC_QiLO_w
Krstic, Kristijan, et al. “Corona-triggered global macroeconomic crisis of the early 2020s.” International Journal of Environmental Research and Public Health 17.24 (2020): 9404. Available at: https://www.mdpi.com/1660-4601/17/24/9404/htm