The great depression thesis topics

The economic devastation of the Great Depression was made worse by environmental destruction. A years-long drought  coupled with poor farming practices created a vast region from southeast Colorado to the Texas panhandle that came to be called the Dust Bowl . Massive dust storms choked towns, killing crops and livestock, sickening people and causing untold millions in damage. Thousands fled the region as the economy collapsed, something John Steinbeck chronicled in his masterpiece "The Grapes of Wrath." It would be years, if not decades, before the region's environment recovered. 

Hitler’s invasion of Poland in September 1939 brought declarations of war from France and England, launching the Second World War.  Japan had invaded China two years earlier.  These escalating wars turned national attention to defense.  Roosevelt, who had been re-elected in 1936, sought to rebuild a military infrastructure that had been neglected after World War I.  Work on army camps and roads and airfields became a new focus of the WPA as private employment still lagged pre-depression levels.  But as the war in Europe intensified with France surrendering to Germany and England fighting on, ramped-up military production began to reduce the persistent unemployment that was the main face of the depression.  Jobless workers were absorbed as trainees for defense jobs and then by the draft that went into effect in 1940, when Roosevelt was elected to a third term.  The Japanese attack on Pearl Harbor in December 1941 that brought the United States into World War II sent America’s factories into full production and absorbed all available workers. 

After showing early signs of recovery beginning in the spring of 1933, the economy continued to improve throughout the next three years, during which real GDP (adjusted for inflation) grew at an average rate of 9 percent per year. A sharp recession hit in 1937, caused in part by the Federal Reserve’s decision to increase its requirements for money in reserve. Though the economy began improving again in 1938, this second severe contraction reversed many of the gains in production and employment and prolonged the effects of the Great Depression through the end of the decade.

Building on both the monetary hypothesis of Milton Friedman and Anna Schwartz as well as the debt deflation hypothesis of Irving Fisher, Ben Bernanke developed an alternative way in which the financial crisis affected output. He builds on Fisher's argument that dramatic declines in the price level and nominal incomes lead to increasing real debt burdens which in turn leads to debtor insolvency and consequently leads to lowered aggregate demand , a further decline in the price level then results in a debt deflationary spiral. According to Bernanke, a small decline in the price level simply reallocates wealth from debtors to creditors without doing damage to the economy. But when the deflation is severe falling asset prices along with debtor bankruptcies lead to a decline in the nominal value of assets on bank balance sheets. Banks will react by tightening their credit conditions, that in turn leads to a credit crunch which does serious harm to the economy. A credit crunch lowers investment and consumption and results in declining aggregate demand which additionally contributes to the deflationary spiral. [38] [39] [40]

The great depression thesis topics

the great depression thesis topics

Building on both the monetary hypothesis of Milton Friedman and Anna Schwartz as well as the debt deflation hypothesis of Irving Fisher, Ben Bernanke developed an alternative way in which the financial crisis affected output. He builds on Fisher's argument that dramatic declines in the price level and nominal incomes lead to increasing real debt burdens which in turn leads to debtor insolvency and consequently leads to lowered aggregate demand , a further decline in the price level then results in a debt deflationary spiral. According to Bernanke, a small decline in the price level simply reallocates wealth from debtors to creditors without doing damage to the economy. But when the deflation is severe falling asset prices along with debtor bankruptcies lead to a decline in the nominal value of assets on bank balance sheets. Banks will react by tightening their credit conditions, that in turn leads to a credit crunch which does serious harm to the economy. A credit crunch lowers investment and consumption and results in declining aggregate demand which additionally contributes to the deflationary spiral. [38] [39] [40]

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