Great Depression

AAA

DEFINITION of 'Great Depression'

An economic recession that began on October 29, 1929, following the crash of the U.S. stock market. The Great Depression originated in the United States, but quickly spread to Europe and the rest of the world. Lasting nearly a decade, the Depression caused massive levels of poverty, hunger, unemployment and political unrest.

INVESTOPEDIA EXPLAINS 'Great Depression'

The NYSE crashed on October 24, 1929, a day known as Black Thursday. Thousands of people lost nearly the entire value of their investments, leaving them with next to nothing. The trend continued and the following Tuesday, Black Tuesday, the DJIA dropped 12%, marking the start of the great depression. International trade declined, along with personal income, tax revenues and product prices.

Many economists believed the Great Depression was evidence that capitalism, when left unchecked, is a dangerous ideology. This caused some nations to change their political structures, such as Germany, who adopted fascism.

RELATED TERMS
  1. The Great Recession

    The steep decline in economic activity during the late 2000s, ...
  2. Service Certificates

    Bond-like certificates that promised payments at maturity date ...
  3. Reconstruction Finance Corporation ...

    An agency created by the the U.S. government to aid the troubled ...
  4. Stock Market Crash Of 1929

    A severe downturn in equity prices that occurred in October of ...
  5. Crash

    A sudden and significant decline in the value of a market. A ...
  6. Economic Collapse

    A complete breakdown of a national, regional or territorial economy. ...
RELATED FAQS
  1. How did the Glass-Steagall Act affect commercial and investment banking?

    The Glass-Steagall Act limited commercial banks' ability to engage in investment practices. This policy was implemented following ... Read Full Answer >>
  2. What caused the stock market crash of 1929 that preceded The Great Depression?

    The stock market crash of 1929 was due to a market that was overbought, overvalued and excessively bullish, rising even as ... Read Full Answer >>
  3. What techniques are most useful for hedging exposure to the banking sector?

    The banking sector moves in the same direction as the broader market, but its volatility is much lower. The sector's stability ... Read Full Answer >>
  4. How does deflation impact consumers?

    Deflation impacts consumers positively in the short term but negatively in the long term. In the short term, deflation essentially ... Read Full Answer >>
  5. Were there any periods of major deflation in U.S. history?

    In historical contexts, the second half of the 20th century in the United States was unique because of how little deflation ... Read Full Answer >>
  6. What is a deflationary spiral?

    A deflationary spiral occurs when a depressed economy leads to falling prices. Consumers stop spending and firms stop investing ... Read Full Answer >>
  7. What are some examples of expansionary fiscal policy?

    The two major examples of expansionary fiscal policy are tax cuts and increased government spending. Both of these policies ... Read Full Answer >>
  8. What investors come close to challenging Warren Buffett as the greatest investor ...

    Warren Buffett is considered by many to be the greatest investor of all time. There are, however, some contenders for his ... Read Full Answer >>
  9. What are some examples of successful implementation of monetary policy?

    It is very difficult to evaluate monetary policy because of the dynamic and undefined nature of macroeconomics. By its very ... Read Full Answer >>
Related Articles
  1. Fundamental Analysis

    The Problem With Financial Journalism

    One of the most serious problems facing the general investing public is that that they fail to learn enough about investments until/unless they go wrong.
  2. Active Trading Fundamentals

    Recession: What Does It Mean To Investors?

    Understanding the business cycle and your own investment style can help you cope with an economic decline.
  3. Options & Futures

    Why Gold Matters

    Gold is a very useful investment during periods of instability and high inflation.
  4. Economics

    The Stock Market: A Look Back

    The past century was marked by furious economic change. What can it tell us about what lies ahead?
  5. Personal Finance

    The Crash Of 1929 - Could It Happen Again?

    Learn about the series of events that triggered the Great Depression.
  6. Economics

    What Caused The Great Depression?

    Learn how government actions may have contributed to this major economic downturn.
  7. Personal Finance

    Recession And Depression: They Aren't So Bad

    Financial downturns are part of the economic cycle and may have important long-term benefits.
  8. Budgeting

    The Greatest Market Crashes

    From a tulip craze to a dotcom bubble, read the cautionary tales of the stock market's greatest disasters.
  9. Personal Finance

    Weak Oil, Sanctions' Bite, Mean Misery for Russia

    Low oil prices, coupled with crippling sanctions, will mean Russia will suffer declining growth and vicious inflation for at least the next two years.
  10. Investing

    The Labor Market Recovery’s Missing Ingredient

    Job creation is running at the fastest pace since the 90s, and there is some evidence that wage growth is finally starting to accelerate, albeit modestly.

You May Also Like

Hot Definitions
  1. Coupon

    The interest rate stated on a bond when it's issued. The coupon is typically paid semiannually. This is also referred to ...
  2. Redemption

    The return of an investor's principal in a fixed income security, such as a preferred stock or bond; or the sale of units ...
  3. Standard Error

    The standard deviation of the sampling distribution of a statistic. Standard error is a statistical term that measures the ...
  4. Capital Stock

    The common and preferred stock a company is authorized to issue, according to their corporate charter. Capital stock represents ...
  5. Unearned Revenue

    When an individual or company receives money for a service or product that has yet to be fulfilled. Unearned revenue can ...
Trading Center