Money supply decreased considerably between Black Tuesday and the Bank Holiday in March when there were massive bank runs across the United States. There are also various heterodox theories that downplay or reject the explanations of the Keynesians and monetarists. The consensus among demand-driven theories is that a large-scale loss of confidence led to a sudden reduction in consumption and investment spending. Once panic and deflation set in, many people believed they could avoid further losses by keeping clear of the markets.
While the Great Depression tended to affect most countries in a similar way, the factors which caused the economic slump in each country were slightly different. This chapter discusses the causes and impact that the Great Depression had on three prominent European countries: Britain, Germany and France.
Post-war Europe Some historians and economists believe that since the crash of the Wall Street Stock Exchange is considered as the official beginning of the Great Depression, the crash caused the Depression.
Long beforehowever, countries in Europe were struggling with their failing economies and high unemployment rates. Unlike the United States, which did not enter World War I until one year before it ended, the close geographical proximity to the war front prevented European countries from being anything other than heavily involved in the war from the beginning.
Many European nations did not escape with the comparatively minor casualties and financial losses of the United States.
These European countries poured all of their economic resources into the war effort. Nations such The great depression france Britain and France even borrowed money from the United States to finance the purchase of weapons.
In the years which followed the end of the war, many European nations found themselves with large war expense debts.
See image 1 Britain After the war ended, Britain found herself in an unfamiliar position - second to the United States as the most powerful player in the world economy. The preoccupation of military matters among European nations enabled the United States and Japan to begin to expand their industrial exports.
It was not long before Britain was edged from her position at the forefront of the world market. Even after the war was over, industries including steel and shipbuilding which had been the core of British export trade struggled to survive without the military to create a demand for goods.
Cut-backs in production resulted in mass unemployment. Bytwo million workers in Britain's industrial centres were unemployed.
To protect their own industries Britain, along with other countries, began to raise tariffs on foreign imports. This, however, only decreased international trade and pushed the country further into the Depression.
See image 2 In an attempt to restore the economy, Britain returned to the Gold Standard method fixing the value of currency to an amount of gold at the pre-war exchange rate. Inflation during the war, however, resulted in the Pound Sterling becoming overvalued currency currency which is too high in relation to currencies of other countries.
This meant that British exports were more expensive on world markets, thus discouraging foreign countries from importing Britain's goods. Some argue that the Gold Standard contributed to the collapse of world trade. They believe that once Britain abandoned the Gold Standard in September followed by a number of other nations British exports were able to enjoy greater competition on world markets.
There are others, however, who believe the reverse. It has been suggested that without a fixed and predictable method to determine how many US dollars, for example, were equivalent to British pounds, international trade suffered.
See image 3 Since Britain was no longer the world's banker, having lost much of her foreign investment, and was unable to rely on her exports, restoring the economy was not going to be a simple undertaking. To worsen the situation, Britain and a number of other Allied nations were dependent upon reparations compensation for war damages from Germany to cover their debt repayments to the United States.
Germany, however, could not afford to pay these reparations, which often resulted in default failure to make payments. Eventually, the grip of the Depression began to loosen on Britain.The Great Depression And Economic Depression Words | 8 Pages “The Great Depression” The Great Depression may be known to the world as the toughest economic period of the industrialized world that brought severe consequences to a vast number of countries in the west.
As a result, France was one of the last countries to feel the impact of the Great Depression.
Although dark economic clouds started to appear on the distant horizon in , the years though were actually boom years for the French.
The Great Depression really did not hit France until The great Depression in France was unique: it began more slowly than in the other industrial countries, was less severe but lasted longer.
The main reasons for these special features are the evolution of the exchange rate (under and later overvalued), policy errors, exposure to foreign competition, and dependence on foreign markets. The Great Depression was a severe worldwide economic depression that took place mostly during the s, beginning in the United grupobittia.com timing of the Great Depression varied across nations; in most countries it started in and lasted until the lates.
It was the longest, deepest, and most widespread depression of the 20th century. In the 21st century, the Great Depression is. The Great Depression affected France from about through the remainder of the decade.
The crisis affected France a bit later than other countries, hitting around While the s grew at the very strong rate of % per year, the s rate fell to only %.
A large body of research has linked the gold standard to the severity of the Great Depression. This column argues that while economic historians have focused on the role of tightened US monetary policy, not enough attention has been given to the role of France, whose share of world gold reserves soared from 7% in to 27% in