Great Depression Chapter Summary

When the society experiences an economic recession, people often think about the Great Depression in 1930s. Up to the present, many researchers attempted to study on Great Depression to gain a lesson. Friedman claimed that policy makers could not take proper actions depended on the radical changes in the international environment after the First World War ended. However, he only considered a single factor and excluded other important factors such as Customs Law and international monetary system. On the other hand, Samuelson advanced an opinion that chains of historical events were fortuitously coincided. However, his opinion did not consider the repeatability of recession and the similarity of economic issues. Also, others claimed theories based on banking crises and failure of the gold standard. The book, The World in Depression 1929-1939 by Kindleberger, stated the reasons that the global Great Depression became a long term event. Britain lost their guarantor position in the global economy and currency system. Thus, the United States did not want to take over Britain’s position until 1936. Different researchers gave different views on why the Great Depression occurred. Therefore, it is necessary to inquire into the context in the Great Depression era. The book, The World in Depression 1929-1939 by Kindleberger, represents entire progress of the Great Depression and explains the cause of Great Depression in chapter one to five. In first half of …show more content…
First, Britain chose an earnest monetary policy which was the gold standard. Second, European countries were full depended on the support of the United States’ loans. Third, Federal Reserve decreased in rediscount rate which caused the rash and delirious speculation in the stock market. In addition, the collapse of agriculture caused global depression by Kindleberger’s