History Lesson: The Great Depression

The Great Depression

When learning about the stock market and how it works you might come across the Great Depression. It is a reminder of what can happen when there is mass panic, lack of regulation, and no government oversight.

So, what is the Great Depression?

A famous stock market crash happened in the United States in October 1929. Over several days panicked investors sold so many shares of stock that the whole market collapsed.

During the 1930s much of the world faced harsh economic conditions. Many people were out of work, hungry, or homeless. This period is called the Great Depression. It started in the United States, but it quickly spread throughout the world.

What was the cause?

The main cause of the Great Depression was a stock market crash in October 1929. People lost a lot of money because the value of stocks dropped quickly and suddenly.

What happened after the crash?

During this 10-year time period, there was a big drop in business activity, people lost their jobs, and many banks and businesses shut down. Almost every part of the economy suffered. Farmers could not sell their crops, banks, and businesses closed, and wages fell to very low levels.

Overall, the Great Depression was a very difficult time period for most of the world. Millions of people dealt with extreme economic hardship that had long-lasting effects on the global economy.

How did it impact the Middle East?

The impact and severity varied across the region but on the whole, it led to less international trade. This did hurt the Middle East as then the region’s economy was dependent on exporting goods (like oil and textiles). The Great Depression caused a significant drop in commodity prices, including oil. There was also a decrease in international investment in the Middle East.

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