The paper 'Economic Problems of the 1920’ s" is a good example of macro and microeconomics coursework. The 1920s represented a time of major economic changes, improvements, adjustments, alterations and reforms in everything all over the world. The decade roared in some selected areas but was a big disappointment for others. The periodic time of the 1920s earned it its name the “ roaring twenties” because the decade sustained prosperity, there were lively cultures and technology was in its advanced stages. The decade marked the distinct flourishing and advancement of the mass-consumption economy, modern mass production, which raised the bar for the living standards of the middle urban working class as well as delivered remarkable profit margins for investors.
But it was not all rosy. Towards the end of the decade, the world suffered the famous ‘ Great Depression’ . The great depression was virtually a severe and intense worldwide economic downturn which made many people lose their jobs and homes. The great depression first originated from the United States of America and went on to affect many if not all the counties worldwide. The period and time of great depression greatly varied between countries.
It first started in the late 1920s and ran through the 1930s and ended in 1940 right before the start of the Second World War This era virtually devastated everyone; people from all walks of life, the poor and rich and people from all occupations of life. The term ‘ Great Depression’ was first contrived by Lionel Robinson, a British economist who wrote the book ‘ The Great Depression’ in 1934. But it was President Hoover who later popularized it in his statement where he quoted “ I need not remind all of you that right this moment, our world is going through a period of the great depression. The real cause and reason for the happening of great depression still remain an open and disputed debate amongst historians and economists.
Sociology theorists are divided into two main categories; Keynesian economists and Classical economists. When theorizing the great depression by the Classical economists, they particularly focus on the decisions of central banking and how it led to an economic bubble and overinvestment, or excess supply of gold.
Gold was known to back many of the major currencies at that time. On the other hand, Keynesian economists blame the incompetence of banking and the government as well as overinvestment and under consumption. Many people admit that the events which prompted the great depression were as a result of the stock market crush in 1929. The fateful day of the crash was known to many as the ‘ Black Tuesday’ . This was the most historic stock market downturn in the history of America. 29th of October 1929 was the fateful day that saw the collapse of the stock market and the start of an economic slump which persisted for more than a decade.
The economic slump came off as a big surprise to many people. During the roaring twenties, the economic standings were great. Thousands and thousands of Americans were borrowing money and purchasing stocks as the economy looked promising. More than 9 billion US dollars was given out in the form of loans. This was much more than the total amount of money going round in the whole of America at that time.
The market share prices continued to advance and the people kept on purchasing stocks with a hope that their value would increase. This, in turn, led to an economic bubble.