What was the main cause of the Great Depression?
Causes of the Great Depression
The causes of the Great Depression in the early 20th century have been extensively discussed by economists and remain a matter of active debate. They are part of the larger debate about economic crises. The specific economic events that took place during the Great Depression are well established. There was an initial stock market crash that triggered a "panic sell-off" of assets. This was followed by a deflation in asset and commodity prices, dramatic drops in demand and credit, and disruption of trade, ultimately resulting in widespread unemployment (over 13 million people were unemployed by 1932) and impoverishment. However, economists and historians have not reached a consensus on the causal relationships between various events and government economic policies in causing or ameliorating the Depression.
Causes of the Great Depression
In such a model, one would look for the origins of a serious depression in conditions which produced a decline in Harrod's natural rate of growth, more specifically, in a decline in the rate of population and labour force growth and in the rate of growth of productivity or technical progress, to a level below the warranted rate of growth.[84]