The Great Depression lasted 10 years between 1929 and 1939. Unemployment was already low when the stock market crashed in October 1929. This catastrophic event triggered a series of events throughout the world culminating what became known as “the dirty thirties”. At the height of this depression in 1933 virtually 1 in 4 Americans were out of work. Many people were impoverished sort of both food and clothing, a supreme irony being that large stockpiles of this produce sat idle in warehouses. Economists at the time made the distinction betweeen that of recession and depression. They considered this to be a recession because economic activity was falling or declining as opposed to depression where the economy is depressed below some level. The determining factor here being “the level” which was not accurately defined or clear. (Geoffrey H. Moore)

So from the Economists point of view the Great Depression actually comprised two significant periods of recession. The first of these beginning in 1929 and the second in 1937. In the first period of recession from 1929-1933 the value of goods and services was estimated to fall by some 42% , whereas between 1937-38 they only fell by some 9%. The commencement of the Second World War in 1939 shown a marked improvement in employment as munitions, ships and armament sales increased in order to assist the western allies in Europe.

During the period of the great depression business failures were place at being at around 127 per 10,000 businesses in North America. It is interesting to view the number of Bank suspensions during this period. The chart illustrates the number of Banks each year and the sharp rate in decline. Hence it can be observed that the number of banks reduced by approximately one this during the first recession. This with the number of suspensions hitting a peak of 4,000 in the fifth year. Much of the banking crisis was not transparent to the general public During the 1930’s the USA noticed a sharp increase in the number of displaced people and the emergence of shanty towns or skid row. As the great depression caused so much human suffering in the USA it had major political ramifications. In 1936 the Democrats regained a massive majority in the house and only once in the next 50 years did the Republicans change this situation.

The Great Depression had a number of international economic ramifications. One key aspect being the elimination of the international gold standard. There was an overall increase of Government Controls and particularly in Financial Markets. We have witnessed resent similar examples in the current recession, for example the UK taking public ownership of the majority of the commercial Banks in the United Kingdom. In 1934 the USA established the Securities and Exchange Commission with the express purpose of regulating stock market trading practices. The era also played a key part in establishing macroeconomic policies. In 1936 the famous UK economist John Milton Keanes developed what became known as the General Theory of Employment Interest and Money. “Keynes’s theory suggested that increases in government spending, tax cuts, and monetary expansion could be used to counteract depressions. This insight, combined with a growing consensus that government should try to stabilize employment, has led to much more activist policy since the 1930s” (Romer)

The economic impact of the Great Recession reached out to truly global perspectives. South East Asia was hit on both economic and political scene. The collapse of Western Industry having a profound impact on international trading. In addition to the destruction of markets and capital it ushered in a profound wave of immigration creating inprecedented policy and political changes in South East Asian countries. The impact on industry both in the USA and United Kingdom was very different. The UK saw a sharp decline in Shipbuilding in the 1930’s whereas in the US certain industies like petrochemical and tobacco seemed relatively recession proof. There were no real natural alignments between industries on an international scale “shipbuilding in the United Kingdom fell by 90 percent during the 1929-1932 period. However, during the same period, output in the United Kingdom actually rose in industries such as paper and printing, leather, and food (Aldcroft 1970). Heim states that in the United States, “Throughout the 1930s, the food, leather, petroleum, and tobacco products sectors were relatively ‘depression-proof’.” (Wheeler)