Great Depression
Definition
The Great Depression was a severe worldwide economic downturn that lasted from 1929 to the late 1930s, characterized by massive unemployment, deflation, and a significant reduction in global trade and living standards. It led to the restructuring of national economies and was a key factor in the development of modern economic policies and institutions.
Analogy
Imagine a thriving city suddenly hit by an unprecedented storm, where most businesses are forced to shut down, the majority of citizens lose their jobs, and resources become scarce. Just as rebuilding this city requires careful planning, coordination, and innovation to ensure such devastation doesn’t happen again, the aftermath of the Great Depression led to the creation of institutions like Bretton Woods to stabilize and rebuild the world's economy.
Related terms
Bretton Woods Institutions: A group of financial institutions established in 1944 to manage international monetary relations and foster global economic stability and growth.
New Deal: A series of programs, public work projects, financial reforms, and regulations enacted by President Franklin D. Roosevelt in the United States between 1933 and 1939 to help alleviate the worst effects of the Great Depression.
Economic Liberalism: An economic philosophy advocating for minimal government intervention in the economy, emphasizing free markets and individual entrepreneurship as drivers for economic prosperity
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