Great Depression In The United States

Introduction The United States has experienced a series of recessions/depressions and economic booms. The roaring 20s was filled individuals new to credit and amazing interest rates, but their fun soon was flipped when the Great Depression hit in 1929. The United States economy continued to experience minor highs and lows of the economy, but the next notable fall was the Great Recession of 2007. During each economic boom or downfall there were three major economic schools of thought that emerged to help economist understand exactly what went wrong in the economy. An economic school of thought can be defined as “a group of people who share common opinions, philosophical outlooks, disciplines, or beliefs about a particular subject of study” (Expert, 2015). The following paper explains the Keynesian, Monetarist, and Austrian schools of economics and their significance to the United States economy.
The Keynesian School
Historical Background …show more content…
During The Great Depression unemployment decreased from three to 25 percent, nationally the income of household were nearly cut in half, and and residential construction nearly diminished (Adler, 2016). It was during this time period of despair that John Maynard Keynes (June 5, 1883 - April 21, 1946) wrote a book called General Theory of Employment, Interest, and Money (1936) to provide his own general theory of how the public government would be able to gain full employment. Keynes lived by the model of “in the long run we are all dead”, and he also believed that saving would ruin the economy in the long run. Since unemployment was so high, as well as no flow of income, businesses were hesitant