Great Depression
The 1930s world depression: synchronized output collapse, catastrophic joblessness, banking panics, and deflation—reordering ideas about money, finance, and the state’s role in aggregate demand.
In the United States the Depression followed the 1929 equity crash and unfolded through waves of bank failures, credit contraction, farm distress, and international monetary dysfunction. Debates continue over gold-standard adherence, Federal Reserve passivity, tariff shocks (Smoot-Hawley), and debt deflation, but not over human cost: living standards cratered for years, not months.
Democracies experimented: deposit insurance, Glass-Steagall separation norms, Social Security, Securities Acts, and a more assertive if uneven fiscal role. Those institutions framed postwar finance until late-century deregulation.
Global and monetary propagation
Because many countries defended gold parities, policy-induced tightening abroad echoed through trade and capital flows—turning a U.S. shock into a worldwide slump. The experience discredited liquidationist orthodoxy for many and elevated Keynes’s case that decentralized price flexibility might not restore full employment quickly.
Long shadow on macroeconomics
Later fights over bailouts, quantitative easing, and inflation targets invoke Depression precedents—why this entry pairs with deflation, monetary policy, fiscal policy, and financial-crisis topics.