The Great Depression was a global economic downturn that lasted almost 10 years, from late 1929 until about 1939, and affected nearly every country in the world. There is no consensus among economists and historians regarding the exact causes of the Great Depression, but among the suggested causes are:
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Stock market crash of 1929: During the 1920s, the U.S. stock market underwent a historic expansion. However, investing in the speculative market in the 1920s led to the stock market crash in 1929, which wiped out a great deal of nominal wealth.
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Banking panics: Banking panics occurred in 1930 and 1931, which contributed to the economic downturn.
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Protectionist tariffs: The collapse of world trade due to the Smoot-Hawley Tariff, which was a protectionist tariff enacted by the U.S. Congress in 1930, also contributed to the Great Depression.
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First World War: The First World War upset international balances of power and caused a dramatic shock to the global financial system. The gold standard, which had long served as the basis for national currencies and their exchange rates, had to be temporarily suspended in order to recover from the costs of the Great War, but the United States, European nations, and Japan put forth different policies to return to it.
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Other factors: Other factors that contributed to the Great Depression include inconsistent monetary policy, agricultural overproduction, and a decline in consumer spending.
The Great Depression had devastating effects on both rich and poor countries, with falling personal income, prices, tax revenues, and profits. International trade fell by more than 50%, and unemployment in the U.S. rose to 23% .
