During the first five years of the depression, the economy shrank by 50%. Therefore, be sure to refer to those guidelines when editing your bibliography or works cited list. As Eichengreen shows, the countries that followed Britain off gold in 1931 managed to avoid the worst effects of the Depression. International Impact of the Great Depression Once Debtor countries used up their meagre reserves, they had to take steps to cut their imports. If you want to learn more about this strategy, click here. Three factors played roles of varying importance. Consequently, it was the spread of totalitarianism and not economic hardship that occupied the minds of Europeans in the 1930s. Countries that devalued gained a competitive advantage for their exports, but in doing so they put an even greater strain on nations that strove to maintain the external value of their currencies. 39 terms. Many U.S. banks, new and enthusiastic entrants to this profitable business, were as devoid of good judgement as were the eager borrowers. While the Great Depression took a huge toll on the U.S., there were a few good things that came from it. In countries such as Germany and Japan, reaction to the Depression brought about the rise to power of militarist governments who adopted the aggressive foreign policies that led to Second World War." Next Section Americans React to the Great Depression As demand for goods and services fell, many companies were forced to shut down, increasing unemployment. What were the causes of the Great Depression? The aim of devaluation was to stimulate the U.S. economy and it was an essential prerequisite for New Deal policies designed to raise export-oriented farm prices. The Depression hit hardest those nations that were most deeply indebted to the United States , i.e., Germany and Great Britain . Iconic buildings includethe Chrysler Building, Rockefeller Center, andDealey Plaza in Dallas. How did the United States and other countries recover from the Great Depression? Among the architects were Walter Gropius and Ludwig Mies van der Rohe. The use of tariff increases was not confined to debtor nations. (1) Abandonment of the gold standard and currency devaluation enabled some countries to increase their money supplies, which spurred spending, lending, and investment. Instead, it changed that dream to include a right to material benefits. "The Great Depression in Washington State: Economics and Poverty. After two years of depression, financial institutions in many countries were in a highly vulnerable position. ", Watson Institute, Brown University. Therefore, that information is unavailable for most Encyclopedia.com content. Annual GDP growth jumped to 17.7%. Also many people died of diseases because they became so unhealthy or the conditions they lived in were very unsanitary.The affects of the Great Depression. (3) The gold standard required foreign central banks to raise interest rates to counteract trade imbalances with the United States, depressing spending and investment in those countries.

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